Factors to Consider
When in doubt, always contact your insurance agent before you file a claim. Your claims history is a major contributing factor to your insurance premiums so its best to consider these things before contacting your company directly. Here are the main factors to consider:
- Type of claim
- Estimated amount of claim – how much will it cost repair?
- Number of previous claims submitted (whether paid or not)
Type of Claim
The intent for homeowners insurance is to protect your home from “sudden and accidental” damage that is “catastrophic” in nature. What is “catastrophic”?
- Tornado or large hail with visable damage
- Fire and smoke damage which leaves you without a functioning home
- Water damage as a result of a broken pipe
- Heavy snow or ice that causes your garage roof to collapse
All of the above are examples of claims which definitely should be submitted without hesitation.
But what about the smaller stuff? If you’re wondering if insurance will cover it or unsure of the extent of the damage, then it’s time to call your agent first. Examples might be:
- Child accidentally breaking a window with a wild pitch in the backyard
- Your washer overflowed onto the floor
- Can of paint spilled onto the carpet while you are repainting your living room
- Small hail with no cracked siding, window or visible denting
These claims do meet the definition of “sudden and accidental” but may not be considered “catastrophic” in most cases.
Estimated Amount of Claim and Deductible
These two factors should be considered together when deciding whether or not to submit a claim especially if your policy currently carries a lower deductible (less than $1,000).
Example: Your policy currently has a $1000 deductible and it would take about $1100 to repair the window your child accidentally broke by hitting a baseball through it. You would probably not want to risk losing a claim free discount or incurring a claim surcharge for a payment of $100.
As a general rule, if the estimated damage is not at least 2 times your deductible, you probably don’t want to put in a claim.
Number of Previously Submitted Claims
Finally, your claim history is an important factor to consider, especially in the case of a “borderline claim”, one which meets the “sudden and accidental” criteria and where the estimated payout is high, but may not be considered “catastrophic” in a traditional sense.
One example might be a case where a windstorm blows a large tree down on a shed in your backyard and it will take about $5,000 to replace the shed and the repair the damage that occurred to the lawnmower and other tools inside.
If you have never submitted a claim before, submitting this type of claim would probably be a wise choice. If, on the other hand, this claim would represent the third claim submitted in a three year period or would give your company the right to cancel your policy, you might want to consider absorbing the cost of the damage yourself.
Homeowners insurance can be a wonderful source of protection and peace of mind when approached responsibly. Just make sure that you understand all the potential consequences involved when deciding whether or not to submit a claim. When in doubt, look to your agent for advice. That’s why we’re experts in our field.