It is true when they say that home is where the heart is. Any homeowner will tell you that their home is one of the biggest investments they have made. In order to properly protect your prized possession, home insurance is a must. But what happens if your basement floods or you experience a house fire over the holidays? When these unexpected events occur, many of us aren’t quite sure when to file a home insurance claim, or how. If you suffer a loss and have to file a claim, there are a few things you can do to prepare yourself to make the process as smooth as possible. We’ve compiled a list of do’s and don’ts for homeowners filing a claim to help you navigate the claims process.
What are the guidelines to filing a home insurance claim?
Not every accident or mishap that you may encounter in your home is worthy of a claim. There are certain situations where it’s smart to make a claim on your insurance policy, and other instances where it is not. As long as the repair costs aren’t too close to the deductible, filing may be the right call. Each situation is different. Therefore, we’re including a general guideline to understanding when to file an insurance claim on your property.
Filing a claim depends on many factors, including:
- How much the cost will be to repair or replace
- Your policy’s deductible amount
- Your claims history
- How much can you afford to pay out of pocket for repairs
- Whether or not your policy includes a ‘claims free discount’
While there is no set number, one claim every five years is an acceptable amount. Too many can result in your policy not getting renewed. Many insurers will not renew home insurance with a history of claims.
6 instances when you should file a claim
Before you consider making a home or auto insurance claim, a good rule of thumb is to take into consideration if the costs are not too close to you deductible. However, there are certain situations that are often worth submitting for:
- Theft
- Property damage and vandalism
- Water and flood damages caused by burst pipes
- House fire or lightning, smoke damages
- Severe weather damage caused by flooding or fallen trees
- Someone is injured on your property – liability concerns
Insurance do’s & don’ts for filing a home insurance claim
Do: Understand your policy
The first and foremost mistake many property owners make is not understanding their insurance policy in-depth. However, failing to understand what’s covered and under what conditions can lead to disputes with the insurance company or a denied claim. At the very least, understand what the coverages in your policy means. For example, some policyholders assume that “sewer back-up coverage” is the same as flood insurance. It isn’t. So, make sure you understand the entire homeowner’s policy contract, including possible endorsements.
Don’t: Neglect your property’s upkeep
Home insurance is for unexpected damage, not problems you can avoid with regular upkeep. Neglecting to maintain your home can lead to problems that won’t be covered by home insurance. For example, damage from a water pipe that suddenly bursts is covered. But an insurance claim for a roof leak you didn’t fix can be denied because you didn’t take proper action to stop damage. Not noticing and reporting a potential claim, like a slow leak, can lead to a claim denial.
Do: Keep a home inventory list
Another claim mistake that starts long before you have any damage is not having a home inventory list. This complete list of your possessions will be especially crucial if you have extensive damage. If you have to work from memory, you’re likely to forget some items and will fail to include them in your claim. A home inventory will make your claim easier and faster.
Other reasons to keep a home inventory list are:
- Knowing your worth: Keep a list of your items and their value easily accessible.
- Determine coverage needed: This helps you decide if endorsement riders and/or floaters are needed (for items such as art, jewelry, furs etc.)
- Verification: Helps to prove items listed on a claim did exist.
- Speed up your insurance claim: Time isn’t wasted trying to make an inventory after damage has already been done.
- Maximize your claim payment: You won’t forget any of your belongings.
Do: Prevent further damages, but don’t make permanent repairs
You may feel like you want to put the whole situation behind you as soon as possible and move forward. Property owners can rush to repairs too quickly. As a result, this can be detrimental to their claims process. It’s advisable to make only temporary repairs to prevent further damage, such as turning off the water supply to a damaged water pipe. If you fail to mitigate the damage, your insurance company may reject your claim or reduce your settlement. Also, you should wait to perform permanent repairs until after the insurance adjuster has assessed the situation. If you proceed with permanent repairs too soon, the insurance company might not cover those repairs.
Don’t: Clean up too fast
You may want to clean up the mess and dispose of damaged items from the incident, but that would be a mistake. Don’t discard damaged appliances or property unless instructed by authorities or your insurance company. Even if the property is burnt or flooded, ensure it stays at the location until an adjuster has inspected it. This hasty action can lead to difficulty proving the extent of the damage, resulting in a smaller payout. If you’re planning on filing a claim for a damaged item, keep it until you have sufficient documentation that it’s been damaged, such as photos or repair estimates. It’s important to keep a thorough paper trail during a claim.
Do: Document the damages
For homeowners filing a claim, the onus to prove the validity of your claim to your insurance company is vital. Insurance adjusters will need as much information as possible to pay your claim. Make sure you document the damage or aftermath of the disaster in detail to help prove your case. If you fail to deliver enough proof (documents, photos, videos, receipts, etc.) to satisfy the adjusters, your insurance provider may reject your claim.
Do: Seek professional help
When it comes time for repairs, the last thing you need is shoddy work from a self-proclaimed jack-of-all-trades. Many property owners also try to handle repairs on their own, which can lead to mistakes and result in a lower settlement. Your home may have more damage than you are even aware of, therefore, it’s important to find experts that know what they’re doing. Check in with your insurer prior to hiring contractors to ensure that their work will be covered. This might mean going back and forth with your policyholder to find qualified professionals, but it’ll be worth it in the long run.
Be careful not to pay in-full or sign on the dotted line before work is actually done to your home. Make sure there is a plan for the work being done, and get all the details in writing.
Don’t: Let yourself be underinsured
One of the worst mistakes homeowners can make is not having enough insurance before the loss occurs. Being underinsured may handicap you from being able to cover the total cost of rebuilding or repairing the property. If you don’t have the proper insurance, you can find yourself in a significant financial hole. A thoughtful conversation with an insurance agent or isure broker can help you avoid these errors.
Not sure if you have enough coverage? Learn more here.
Do: Communicate clearly with your insurer or isure broker
For homeowners filing a claim, communication with your insurance company is vital. If it’s reporting the claim quickly, providing the necessary documentation, or keeping them informed about your repairs, communication should be clear and consistent. Most homeowner insurance policies have conditions that require timely notice of damage. A lack of proper communication can result in unnecessary delays or misunderstandings about the extent of the coverage. The sooner you inform your insurer or broker, the quicker those repairs and payments can happen.
Do: Report the claim as soon as possible
Don’t delay filing a claim. Why? Because it may cause more damage to your home. Reporting a claim as soon as possible can help get repairs going sooner, lessening the time dealing with the repair process. Just keep in mind the guidelines for filing a home insurance claim listed above to decide if the claim is worth making. Rates can go up when you make multiple claims. Not only that, but you will also likely lose your claims-free discount! Therefore, it’s best to save yourself money by only claiming large or extensive damages that may happen.
When an incident causing damage happens, homeowners should report it immediately. Most insurance policies don’t put a time limit on how long you have to file a claim. A good rule of thumb is to file within one year of the incident.
Much like you have yearly check-ups for your health, we recommend everyone complete a home insurance policy coverage review annually. Fully understanding your homeownerls policy will help make you feel better prepared in the event of an unforeseen incident occurring to your home. Homeowners filing a claim should have the best coverage in place ahead of time. Speak with one of our isure representatives when it’s time to renew your policy to ensure that you have adequate coverage in case the unthinkable happens.
