Blog What You Need To Know About Home Insurance Claims

Jan 7, 2021

Filing A Home Insurance Claim

damage from fallen tree

Need to file a home insurance claim? The thought of a basement flood or a tree falling on your roof, is not something homeowners want to think about. But the reality is, it happens and you need to be prepared.

In 2019, insurers paid out $7.9 billion related to personal property. With these numbers on the rise, having proper home insurance helps protect your investment and minimize these risks.

In this blog, we will guide you through the process and provide tips for submitting a claim.

What Happens When You Make A Home Insurance Claim?

Weather damage, accidents, thefts, and property damage happen. Knowing how and when to file is crucial information to understand. Here’s what the process looks like :

  • Insurance record : Submitting it will go on your record.
  • Deductible : You will have to pay your deductible.
  • Paperwork : You will need to compile an inventory of damaged/missing items, provide proof such as receipts, and images.
  • Increased costs : You could see an increase upon renewal.
  • Claim status : There is a chance it could get denied. Make sure you’re covered before filing.

Should You File A Home Insurance Claim?

Whether or not you should file depends on many factors, including :

  • The cost
  • Your deductible amount
  • Your claims history
  • Your ability to pay for repairs out of pocket
  • Loss of your claims free discount

In most instances, it makes more sense and is less hassle to pay for small damage out of pocket, especially if you have the money to cover the repairs. Consider all costs before filing - even small ones can have an impact.

How Do Home Insurance Claims Work?

Door damaged from a break in

The cost you pay is pooled and used by insurers to payout. When you begin the process, money is taken from the pooled money to cover your payout. You are responsible for paying the deductible amount, and your insurer will pay the remainder of the costs for included perils.

It also provides you with protection for loss and damage to personal property or contents, including personal belongings such as clothing, furniture, electronics, and other common items.

It will help with the cost to replace these items, subject to your limits (home replacement cost vs actual cash value).

After damage or loss due to theft, fire, water damage, or weather events, owners will file to recover the personal property, which is separate from structural damage.

Personal items such as jewelry, art, and collectibles may not be included and you may need an insurance rider to cover them.

When To File A Home Insurance Claim

There are certain situations that are often worth submitting for, as long as the costs are not too close to your deductible :

  • Theft : Any personal belongings related to theft.
  • Property damage and vandalism : Substantial damage to the external parts of your building or theft.
  • Water damage and flood : Burst pipes, severe weather.
  • House fire or lightning, smoke : Often these types of damage can impact in structure of your building.
  • Severe weather damage : Flooding or fallen trees.
  • Liability : Injuries on your premises related to legal fees.

Does Home Insurance Increase After A Claim?

It may or may not affect your payments. If you have a clean record and have not filed within the last five years, it should not affect your renewal.

However your ability to be approved can be impacted when :

  • You file for a significant dollar value or submit frequently
  • You file for damage that is not covered
  • It gets denied

These typically stay on your record for 5 to 7 years and may increase your payments during this time. Even if you switch providers, your record will follow you.

How To File A Home Insurance Claim

Filing is a fairly standard process. Most companies follow very similar steps as outlined here:

  • Assess the situation : Take a deep breath and assess the situation. Do a quick overview of the damage. Take steps to prevent further damage (shut off the power) and protect your family. If it is not safe, go outside. If a burglary took place, call the police to file a police report.
  • Contact your insurer : Notify your insurer as soon as possible. They will assist you with starting the process and assigning an adjuster. Your insurer can help you find local contractors to help you secure your property.
  • Document the damage : Take pictures and video of all damage. Record everything in a home inventory document. Do not throw away anything until it’s been approved by your adjuster.
  • Clean up : Hire a restoration company to help you clean up your property. This will be paid for by your insurer.
  • Determine repair costs : The adjuster will visit the building and assess damage. Based on the initial assessment of damage, loss and repairs, you’ll get an estimate. This number will change as you finalize the process.
  • Assess contents loss : Based on your inventory, your adjuster will assess and calculate a settlement value to replace your damaged contents.
  • Repair damage : You can hire a contractor, or your insurer can suggest a company for repairs.
  • Finalize the process : Once the restoration work is complete and you’ve been compensated for your contents, you will sign forms to complete the process.

What Reasons Could Your Claim Be Denied?

Filing a claim does not automatically mean it will be accepted. There are many reasons a it can be denied, including :

  • Lack of coverage : You may not have it for a specific type of damage that you are submitting for.
  • Lack of proof : You need to show you possessed items and damage was caused. If you can’t, some or your entire claim could be denied.
  • Uninsured peril : There are certain perils that are not included such as water damage, flooding, earthquakes and other weather events. These can be added separately.
  • Poor maintenance : If damage is a result of neglected maintenance, it can be denied. For example, if you have roofing issues and don’t get them repaired and your roof collapses, you may be on the hook for the repairs.
  • Intentional damage : Any intentional damage caused by the owner will result in a denial.

Other reasons it could be denied is if you lie to your insurer on your application or you are late on payments.

Home Insurance Claims Advice And Tips

outside view of house

Use these tips to simplify the process :

  1. Call your insurer as soon as possible : If you plan to file contact your insurer as soon as possible after the incident to start the process.
  2. Have a home inventory list : If you don’t have one already, consider creating a home inventory list to make filing easier.
  3. Everything adds up : Don’t short change yourself. Be thorough when getting estimates and include contents in your claim.
  4. Get a quote from independent contractors : Even if the insurer provides a contractor, you can still use independent contractors to get a second opinion and evaluate repair quotes.
  5. Keep records of all communications with your insurer : Keep a record of all communications with your insurer. This will ensure there are no discrepancies.
  6. Get advice : Speak with your advisor about what happened. They can provide you with advice and advocate on your behalf.
  7. Payouts are negotiable : Settlements are negotiable. Make sure you are getting a fair settlement to repair or replace your home and its contents.