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When it comes to filing a homeowners insurance claim, it is vital to weigh out if it is worth it or not by assessing how it will impact your premium in the long run. Never make assumptions about how your homeowner’s insurance works. Speak to your agent to thoroughly understand the process. Home insurance claims stay on your loss report (this shows up to seven years of claims history). Insurers use this report to determine how likely you are to file another claim. If too many claims have been filed, insurers may view you and your home as carrying too much risk and deny you coverage. It is also important to note that you may see a spike in your premium after filing a claim even if an unexpected or accidental incident caused it. Having home insurance does not mean you will be granted fixes whenever you need them, so it is helpful to understand when not to file a claim to prevent future headaches, more expensive premiums, and surprise policy non-renewals.
When Not to File a Claim
It is in your best interest to pay attention to how claims on your record can directly affect your homeowner’s insurance premium. You will want to avoid filing an unnecessary claim. Consider these instances in which it is not advised to file a claim:
Repair or replace costs doesn’t exceed your deductible
The same logic in filing a car insurance claim applies to home insurance. When the deductible is lower than the repair costs, it is better to pay for it out-of-pocket rather than triggering a premium increase. Typically, it is better to deal with minor fixes on your own.
Normal wear-and-tear or maintenance issue
If you neglect your home maintenance tasks and the damage could have been prevented, insurers may not cover it. Homeowners are held responsible for basic care, upkeep, and maintenance. Therefore, home wear-and-tear is not covered even if it leads to significant damage. For instance, after years of neglect, a damaged roof or fence can easily collapse, but insurers will deny the claim since proper maintenance could have prevented it from occurring.
You’ve filed a claim within the last three years
Insurers will undoubtedly check your claims history. If more than one claim filed over the past couple of years (even if it was not paid out), it might not to be worth it. When you go to file another claim, you may not be able to renew your policy, or it could be voided altogether. Depending on your specific situation, you might even find it challenging to secure coverage elsewhere.
When It is Worth filing a Claim
Now you may be wondering when you should use your homeowner’s insurance. Generally, it is best to call your insurer only for significant loss from covered property damage such as when:
Repair or replace costs exceeds your deductible
If there is an expensive repair or replacement to fix your home, and a covered loss caused it, it makes sense to have your insurer help. For example, a disaster strikes and part of your roof has caved in, the costs of the repair are likely much more than the deductible.
There is significant damage or a total loss
This is the main reason homeowners insurance is used. If your home is hit with a large loss from an unexpected incident that has caused it to be unlivable, you should file a Sugarland home insurance claim to help with these losses and resulting expenses.
You have not filed a claim in three years or more
Since claims history is the main factor in determining what to charge you for your premium or whether you are covered, it is wise to be cautious of when it is worth it to file a claim. Insurers believe that those who have previously filed a claim are more likely to file more claims in the future and therefore hold risk they don’t want to be responsible for even if you are on top of premiums. If filing a claim is necessary, it’s recommended that you wait at least 3 years in between them, if possible.
About Transparity Insurance Services
Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.