When Should You File a Homeowners Insurance Claim?

While your homeowners insurance is there for you when covered property or belongings are damaged or destroyed, it does not always mean you should be eager to file a claim right away. 

Now you may be thinking, “isn’t that the point of why I pay for home insurance?”. And yes, while you are covered, homeowners insurance is usually intended to cover catastrophic losses.

Filing smaller or too frequent claims could ultimately increase your insurance premium and hurt your chances of renewal with the insurance provider. 

At Berry Insurance, we have worked with thousands of clients covering their homes, with claims from fires to floods and everything in between. Based on our clients' experiences, we know the damages that require making claims, as well as the ones that might cause more harm than good. 

When you shouldn’t file a homeowners insurance claim

It is important to be aware of how claims will affect your homeowners insurance premium and history. The following is what you should consider before filing a claim. 

You have filed a claim recently: 

The history of claims on your policy, and how often you file insurance claims, are important factors in determining your relationship with your insurance provider. If you have recently filed a claim, especially within the last three years, your insurance provider will be more likely to consider you a high risk. This could increase the cost of your premium and decrease the likelihood of renewal of your policy with that carrier. 

A long history of claims would also make it more difficult to find a new insurance carrier to cover your home. 

The claim amount is close to your deductible:

It’s best not to file a claim over the smaller damages that happen to your property or belongings. If the cost of any repairs or replacements are below or close to the amount of your deductible, you would either be denied coverage or face an increase in your premium for minimal return payment. 

Your deductible is the amount you would have to pay out before an insurance carrier would pay you any claim money. As an example, if your deductible was set at $1,000 and a claim is filed for $1,500 in damages, then you would only get $500 back. You would not make as much back and would have a claim on your policy history that could result in you paying even more than $500 back in the future. 

In the long run, it’s better to pay out of pocket for these smaller claims, rather than risk the potential harm it could do to your policy. 

Non-accidental damages:

Filing claims for any damages to your property or belongings that are deemed to be caused by general wear and tear or negligence on your part, will be denied by your insurance provider.

These damages can include any that occur naturally over time such as mold, rust, rotting, and staining. But also peeling paint, loose handles or hinges, scratches or dents, or anything that just requires general upkeep of your home. 

As your policy strictly covers sudden and accidental damages, any other damages will be considered your own responsibility.

When you should file a homeowners insurance claim

While it is important to consider the options above before considering a claim, there are multiple situations and damages where it is recommended that you file a claim.

There is a catastrophic loss:

This is what your home insurance is usually intended for and where it is the most useful. Any damages that leave your home temporarily uninhabitable (such as from a fire or pipes bursting) or large liability claims, are devastating and costly enough to warrant you file a claim. 

The cost well exceeds your deductible: 

If the cost of any repairs or replacements to damaged property or belongings is much greater than your deductible, or you are unable to feasibly pay out of pocket, filing a claim would be the best option. 

You haven’t filed a claim recently: 

As previously mentioned, the frequency of claims made on your homeowners insurance policy is an important factor in determining your premium and chances for policy renewal with your insurance provider. 

If you have not filed a claim recently (usually within the last three years), your policy would not be affected by one claim. Just be sure to consider the severity of the damages and to space out any potential claims after making the first one. 

Will my policy be canceled if I file a claim? 

A common fear among clients is that filing any claim will result in you getting dropped entirely by your insurance provider. This is unlikely to happen, as most insurance carriers would rarely flat out cancel a policy. If the insurance provider deemed you as a high risk, based on any of the factors mentioned above, you would more than likely not receive renewal on your policy (policies renew every 12 months). 

While non-renewals are infrequent, having 2-3 back to back claims could warrant your insurance carrier dropping your coverage when the policy comes to an end. 

Will my premium increase after a claim? 

After a claim is filed, your insurance credit score will change and then that could potentially change the cost of your premium. Whether or not the cost of your premium changes is dependent upon the carrier's own policies, as well as claim amount and claim payout afterwards.

If you are wondering how you can save money on your homeowners insurance after any possible premium increases, we recommend reaching out to your insurance agent regarding increasing your deductible, bundling policies, or shopping around insurance providers to find the best rates for your home. 

Covering claims

Your homeowners insurance is there for you when you need it in life's most catastrophic moments. However, it’s always wise to know how you are being covered by your insurance and what would change on your policy when choosing to file a claim. 

If you need to know more about what goes into filing a claim, check out this helpful guide: Everything You Need to Know About Filing a Home Insurance Claim.