When to File a Homeowners Insurance Claim
Reading time • 5 minutes
By Matic
Most people pay for homeowners insurance hoping that they’ll never actually use it — but life sometimes has other plans. Whether a storm damages your roof or someone slips and falls on your property, there may come a time when you need to file an insurance claim. You can do this if you’ve experienced a covered event and don’t want to foot the entire bill yourself.
But just because you can file an insurance claim doesn’t necessarily mean you should. Doing so could affect how much you pay in premiums. That’s why we put together this simple explainer on when to consider filing a homeowners insurance claim.
How to decide if filing a claim is worth it
Sometimes filing an insurance claim is the obvious right decision. For example, if you’ve gone through a severe weather event and have significant damage, working with your insurance company could substantially reduce your out-of-pocket costs. Filing a claim allows your insurer to kick in toward the repairs (up to your coverage limit, minus your deductible). After all, this is what your homeowners insurance policy is there for.
However, filing a claim doesn’t always make the most financial sense. It’s generally worth considering if any of the following situations apply. If you’re unsure whether to file, reach out to your insurance agent for guidance. At Matic, policyholders can connect with our team for a claims consultation — we’ll walk you through your options and so you can decide on the right course of action for you.
Your out-of-pocket costs exceed your deductible
Your insurance deductible is the amount you’re on the hook for paying toward an approved claim. The insurer will typically then pay the remainder. Let’s say you have a $1,000 deductible and a storm rolls through. Your home is damaged by wind and hail, and your total repair costs are $5,000. If the claim is approved, you would chip in $1,000 and your insurer would cover the rest.
But if your repair or replacement costs are less than your deductible, it defeats the purpose of filing a claim since your insurer won’t be contributing toward the bill.
You’ve experienced a covered event
Not every damaging event will be covered by your policy. In fact, most standard homeowners insurance policies exclude damage caused by:
- Floods
- Earthquakes
- Water or sewage backup
- Downed electrical lines
However, your insurer may cover damage that’s normally excluded if you’ve added an insurance rider to your policy. This can provide extra protection, such as earthquake or flood coverage.
Just keep in mind that damage caused by regular wear-and-tear, negligence, or a lack of maintenance usually isn’t covered. For example, if you have a leaky pipe that you ignore, and it causes mold damage, it will most likely be excluded.
Having said that, a standard homeowners insurance policy will typically cover the following:
| Type of Coverage | What it Covers (Assuming a Covered Event) |
|---|---|
| Structural coverage | Damage to your home |
| Personal property coverage | Personal belongings that are damaged, destroyed or stolen |
| Liability coverage | Medical and legal fees if someone is injured on your property |
| Additional living expenses | Hotels and meals if you’re unable to live in your home due to damage |
How do I file a claim?
If you decide that filing a claim makes sense, you can follow these steps:
-
- Gather basic information your insurance company may need: That includes the date the event occurred, what happened, and a description of any damage or injuries. You’ll also want to have your policy number on hand, along with the contact information for your insurer. It’s also wise to take photos and keep a record of your losses.
- Begin the claims process: Reach out to your insurance company to report the claim. Be sure to ask questions if you need any clarification regarding their process. Your insurance company will likely send a representative to assess the damage.
- Keep an accurate record: It may take time for your claim to be approved. If you have to make immediate repairs in the short term or stay at a hotel, keep a record of your expenses and hang onto your receipts.
How will my rate be impacted if I file a claim?
Filing a claim can provide some much-needed financial relief and help repair your home after a covered event. But the downside is that your insurance premium will likely increase afterwards. That’s because most insurers consider your claims history when determining your rate. A previous claim could suggest that you’re at higher risk for filing another one in the future. How much your rate changes will depend on the situation and your claims history.
Will my insurer renew my policy if I file a claim?
When your policy expires, it’s up to the insurance company to decide whether they’ll continue covering you. Your perceived risk will play an important role here. If you’ve only filed one claim and have a history of paying your premiums on time, your carrier may not drop you — but filing multiple claims could put you at risk. They might also choose not to renew your policy if:
- The company no longer offers coverage where you live
- Your credit-based insurance score has changed
- An inspection finds liability risks on your property, such as a new trampoline
The bottom line
Whether filing a homeowners insurance claim is a good idea will depend largely on the amount of damage, whether it was caused by a covered event, and your deductible amount. Your past claims history is another important factor to consider. If you do move forward through the claims process, you’ll likely see an increase in your insurance rate — but that may be worth it if you need to make significant home repairs after a covered event.
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