February 11th, 2014
There are several instances in which a homeowner might want to file an insurance claim, such as after their property has experienced significant damage or some of their belongings might have been stolen. However, filing a claim can cause several things to happen, including seeing your homeowners insurance rates rise and figuring out when to file a claim is not clear cut. In fact, there are some circumstances in which it might actually be better to pay out of pocket for your losses. Here is how to figure out when to file a homeowners insurance claim:
Assess the damage
The most important consideration is how much damage has occurred. This will help you figure out if it's worth it to file a claim. On one hand, you will be reimbursed for the damage, but you should weigh the cost of repairs against your deductible. Additionally, homeowners should think about whether their premiums will rise after making a claim. Paying off the damage without filing a claim could potentially cost less than a rise in a premium over time.
Consider your insurance history
In addition to the expenses, homeowners should think about what other insurance claims they have filed. For example, if you file an expensive claim after your home is hit by lightning, you will be reimbursed for the damage. If something else happens that is less serious and you file more claims, you could run the risk of having a more expensive policy or even being dropped from your provider when it comes time to renew.
Know your policy
Before filing a homeowners insurance policy, be sure to read through your policy. Be sure to understand what is covered and what types of damage or loss might be excluded. If you don't understand something in your policy, be sure to speak with a representative from your insurance company to get the full details. Be sure to document everything and keep a record of any expenses from the damage and any contact with your insurance company.
When not to file
There are some instances when filing a claim won't help you. For example, if your home experiences water damage, there is a chance that you won't have coverage. Most homeowners insurance policies don't have flood insurance, and filing a claim could have lasting effects on your policy.