When to File a Homeowners Insurance Claim

Does your home insurance company need to know about every incident that causes damage to your property?

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When should you file a homeowners claim?

In car insurance, you need to be cognizant of when to file a claim and when it's better not to, and consider how doing so will affect your premium and pocketbook in the long run. Homeowners insurance works in the same way. Never assume your homeowners insurance will cover what you think it will. See this guide on what homeowners insurance covers.

Home insurance claims stay on your Comprehensive Loss Underwriting Exchange (CLUE) report — which contains up to seven years of claims history and helps insurance companies judge how likely you are to file another claim — and if you rack up one too many, insurers can void your policy if they think you and your home carry too much risk. You may also be surprised to see a hike in your premium after filing a claim even if the cause of the claim is due to an unexpected or accidental incident — exactly what home insurance is meant to protect against.

The unfortunate reality is that just because you pay for home insurance does not mean your insurer is obligated to help pay for fixes whenever you need them. Knowing when not to file a claim will save you from future headaches, more expensive premiums, and surprise policy non-renewals.

  1. When you should NOT file a claim
  2. When you should file a claim
  3. Common reasons for claims denial
  4. What to consider

When you should NOT file a home insurance claim

Be aware of how claims on your record will affect your homeowners insurance premium, and you'll be happier you didn't file an unnecessary claim. Here are the instances in which it would not be wise to call up your insurer.

1: The cost to repair or replace does not exceed your deductible

The same logic in whether or not you should file a car insurance claim also applies to home insurance: if your deductible is less than how much it would cost to repair the damage, it makes more sense to pay for it out-of-pocket instead of facing an increase in your premium. As a general rule, don't sweat the small stuff and don't involve your insurance company for minor fixes.

2: It's a maintenance issue or normal wear-and-tear

If there's something you could have done to prevent the damage, insurance likely will not cover it. It's the homeowner's responsibility to care for basic upkeep and maintenance, so wear-and-tear in your home will not be compensated for by your insurer even if it ends up completely destroyed after a covered loss. If your roof or fence is already damaged and worn after years of neglect, and it collapses after a heavy snowfall, the insurance company will deny the claim because it could have been prevented had you kept up with maintaining your property.

3: You've filed a claim within the last three years

Insurance companies get flighty if they look at your claims history and see more than one claim filed within the past couple of years — even if it was never paid out, and it was denied or unresolved. Filing a claim when you already have a few under your belt risks getting your policy non-renewed or voided, and you may even have trouble getting coverage elsewhere.

When you should file a homeowners insurance claim

So, what should homeowners insurance be used for? As a rule of thumb — bigger losses following a peril that damaged your property.

1: The cost to repair or replace exceeds your deductible

Disaster strikes and part of your roof has caved in. The estimate for repair is $5,000 and your deductible is $1,000. It would be prudent — and worth it — to file a homeowners claim with your insurance company to get it fixed. If it's an expensive repair or replacement to fix your home, and it was caused by a covered loss, it makes more sense to get your insurer involved to help pay for it.

2: There's significant damage or a total loss

This is primarily what homeowners insurance is most useful for — when your home suffers a loss so great after an unexpected incident that it becomes uninhabitable. In these cases, you should definitely file a claim to recoup your losses.

3: It's your first claim in three years

As we previously mentioned, insurers take your claims history into account when they decide what to charge for your premium, or whether they should even cover you at all. Statistically — whether for homeowners or car insurance — if you've previously filed a claim, you're more likely to file more claims in the future. For insurance companies, that's a risk they don't want to be responsible for even if you pay your premium every month. When you do need to file a claim, make sure to space them out as much as possible.

Common reasons homeowners claims are denied

Any claim you file will be investigated by a trained claims adjuster for authenticity. However, unless you have a company with a bad reputation for claims handling, it generally shouldn't be a surprise. Let's outline the big reasons you can have a denied homeowners claim.


1. The damage was caused by a non-covered peril

If the peril (cause of loss) is excluded from coverage, your insurance company will deny your claim. For example, flood. If a hurricane floods your basement, you are not going to have any homeowners coverage because flood is an excluded peril on every homeowners insurance policy. To have this claim covered, you would need flood insurance through FEMA. Other causes of loss, such as mold or water backup, might be covered if you have their coverage endorsements. An endorsement is any change to your policy. In this case, you would need to buy a mold or water backup endorsement to have your claim paid out.


2. If the damage was intentional or avoidable

Insurance will not cover any malicious intent. Any damage you intentionally caused to your home will not be covered. Any time you file a claim, the source of loss will be investigated by trained claims adjusters. Meaning, you should think carefully before you file a claim after intentional damage. Furthermore, if the damage was caused by neglect — i.e., avoidable — don't expect insurance assistance. 


3. If the damage was caused by wear and tear or maintenance issues

Homeowners insurance is designed to cover sudden and abrupt damage. If you had a slow leak in your basement and mold formed, your insurance will not cover it. The same is true for old roofs, flooring, or siding. Any maintenance or wear/tear losses are up to the homeowner or a warranty to replace.


4. If your policy was canceled/inactive at the time of claim

This one is pretty straightforward. If your policy canceled on the 1st and you file a claim for damage that occurred on the 10th, your claim will be denied. Even if you reinstate your policy, it's very unlikely your company will honor your claim. Our best advice: always pay your insurance bill! If you're getting a new policy with a different provider, do not leave any days without coverage. 


5. If you waited too long

Your statute of limitation to file a claim can vary by your company and by your state. If you wait too long, you could have your claim denied.


6. If the value of damage doesn't exceed your deductible

If you're uncertain of the total cost of damage, get an estimate before you contact your insurance company. Even if you have $0 payout, this claim can impact your premium.


What to consider when filing a homeowners claim

By how much you can expect your premium to increase following a home insurance claim relies on a few variables: your location, the cause of the claim, your claims history, and how much the claims payout cost the insurance company. Liability claims tend to affect premiums the most, and you can expect your premium to increase drastically if you file one.

When deciding whether you should file a home insurance claim, weigh whether it will be worth the extra cost over the long run, and consider the potential risks to your home insurance coverage. You don't want to be caught in a situation where your home has suffered significant damage after a disaster, but you were unable to acquire insurance because of your claims history. Knowing when and when not to file a claim will save you more money and keep your status with your insurer more stable and secure for when you really need it.

Shopping for homeowners insurance? Call The Zebra today to explore your options.

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