Pros and Cons of Filing a Homeowners Insurance Claim (2024)

1

When Repair Costs Are Greater Than Your Deductible

You should consider filing a claim when the cost of repairing or replacing the damage exceeds your deductible or the initial amount you must pay out of pocket. If the repair costs significantly surpass this amount, it's a good indicator that involving your insurance is the right course of action.

2

When The Damage Is Covered Under Your Policy

Filing a claim is advisable when the damage to your property is substantial and falls within the scope of coverage outlined in your policy. This might include scenarios like severe storm damage, fire or vandalism. Ensure that the type of damage aligns with your policy's terms and conditions to maximize your chances of approval.

3

When You Have Additional Coverage to Pay for Certain Damages

If you have additional coverage, such as flood or earthquake insurance, you should file a claim when these specific events cause damage to your property. These types of natural disasters are often not covered under standard homeowners insurance policies, so having the appropriate additional coverage is essential.

1

When the Repair Costs Are Minimal

It's better to pay for minor repairs or damages out of pocket if they are lower than your deductible. Filing a claim for small expenses can lead to increased premiums, ultimately costing you more in the long run. In these cases, it's wiser to handle the repairs on your own.

2

When You Have Multiple Claims

Having several claims in a short period can have adverse consequences. Frequent claims can even result in your insurer choosing not to renew your policy if they find that you have filed a lot of small claims in the past. Choose what to file a claim for wisely.

3

When Your Policy Doesn’t Cover the Damage

Not all perils are covered by standard homeowners insurance policies. For instance, flooding and earthquakes often require additional coverage. If the damage is caused by an event not covered by your policy, filing a claim would be futile and could negatively affect your claims history. In such cases, it's better to seek alternative solutions for addressing the damage.

1

Contact Your Insurance Provider

Begin by reaching out to your insurance company as soon as possible after an incident. You can typically find its contact information on your policy documents or its website. Be prepared to provide your policy number and a brief description of the damage or loss.

2

Document the Damage

Take photos or videos of the damage to your property and belongings. This visual evidence will be crucial in supporting your claim. Make sure to document all affected areas thoroughly and include supporting documents such as receipts, repair estimates and other documents.

3

File a Police Report (If Necessary)

In cases of theft, vandalism or criminal activity, it's essential to file a police report and obtain a copy. This report will serve as additional evidence for your claim.

4

Complete the Claim Form

Your insurer usually provides a claim form to fill out. Ensure that you provide accurate and detailed information about the incident, including the date, time and description of what occurred.

5

Cooperate With the Claims Adjuster

It's common for your insurance company to send a claims adjuster to evaluate the damage. Work closely with them, grant them access to the affected areas and supply any necessary documents they might need. The adjuster's assessment is key in deciding the resolution of your insurance claim.

6

Review the Claim Settlement

Once your claim has been processed, your insurer will provide you with a settlement offer. Review it carefully to ensure that it adequately covers the damage and losses you've incurred. If you're satisfied with the settlement offer, you can accept it and your insurer will proceed with the payment. If you believe the offer is insufficient, you have the option to negotiate with your insurer to reach a fair resolution.

7

Receive the Payment and Complete the Repairs

Once you've agreed on the payout, your insurer will issue a payment to cover your losses, repairs or replacements as outlined in the settlement. Use the funds to repair or replace the damaged or lost properties. Maintain records of these expenses, as your insurer needs them for verification.

Home insurance claims stay on your record for at least five to seven years, but whether it stays on your record depends on the type of claim and its severity.