Blog What You Need To Know About Home Insurance Claims

Jan 8, 2025

Filing a home insurance claim

tree fallen on to a house

Do you need to file a home insurance claim? The thought of a basement flood, fire, 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.

According to data from 2023 FACTS of the Property and Casualty Insurance Industry in Canada, private P&C insurers wrote $17.4 billion in direct written premiums for personal property insurance and paid out $9.9 billion for direct claims incurred (2022). This is $2 billion more than IBC reported in 2019 when insurers paid out $7.9 billion related to personal property. With these numbers on the rise, having proper coverage helps protect your investment and minimize these risks.

What you need to know about home insurance claims

  • Weigh the pros, cons, and financial considerations of filing before starting the claims process.
  • A single claim could increase your premiums by 7.5% or more.
  • Home insurance claims can stay on your record for 5 years or more, depending on your insurer.

What happens when you make a home insurance claim?

Weather damage, accidents, thefts, and property damage happen. Opening a claim will affect your insurance record, and it can increase your premiums. Knowing how and when to file is crucial information to understand. Here’s what the process looks like:

  • History: Submitting one will go on your claims history.
  • Deductible: You will have to pay your deductible.
  • Paperwork: You will need to compile an inventory of damaged/missing items, and 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. Here’s a list of top things to consider when making a decision to start a claim:

  • 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, paying for small damage out of pocket makes more sense and is less hassle, especially if you have the money to cover the repairs. Consider all costs before filing - even small ones can have an impact. Speak with our brokers if you are not sure what to do.

How do home insurance claims work?

Your home insurance premiums are pooled and used by insurers to payout claims. When you file a claim, funds are 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, up to your policy limit.

How do home insurance claims affect premiums?

Always think twice before opening an insurance claim. Remember that each claim added to your insurance record could increase premiums. Claims will stay on your record for multiple years, and your rates will remain elevated during this time. Here’s an example of how the number of home insurance claims can affect your payments:

Number of claims Avg annual premium (2024-25) Monthly payment Premium increase (%)
No claims $1,411 $118
1 claim $1,517 $126 7.50%
2 claims $1,564 $130 10.80%

Based on our customer quote data*, a single home insurance claim can increase your premiums by 7.5%. Two claims can increase your rates by over 10%. More serious and larger dollar-value claims could increase your rates even more.

Types of home insurance claims

There are 5 common types of claims insurers see most frequently:

  • Theft: Any personal belongings related to theft.
  • Property damage and vandalism: Substantial damage to the external parts of your building or theft.
  • Water 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.

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 home insurance claim be denied?

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

  • Lack of coverage: You may not have coverage for a specific type of claim 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: Certain perils, such as flooding, earthquakes and other severe weather events, are not included. 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.

A claim can also be rejected if you lie to your insurer on your application or if you are late on payments.

Home insurance claims advice - tips for a quick and easy claims process

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.

Is there a time frame to start and finalize a home insurance claim?

Yes. Most insurers have a time limit on when you must open it. The limit can vary from as little as three months up to one year from the damage or loss date. Check with your insurer to clarify the time frame.

Most insurers provide you with one year to open and finalize it. If you do not finalize it after one year, it could be denied. Speak with your insurer about the process and time limits.

What can I do if my home insurance claim is denied?

There are ways to resolve the situation. Here is what to do if it is denied:

  1. Review your submission: Check your policy to make sure your provider has grounds to deny it or if you made any errors.
  2. Understand why: Review the reasons why it was denied.
  3. Understand your options: You have the right to appeal the decision. Consider an independent appraisal.
  4. Contact the General Insurance Ombudsman Service: You can get free advice and learn more about your options for filing a complaint.
  5. Get legal advice: If all else fails, contact your lawyer to get legal advice about your options regarding it.

You may be cancelled upon renewal after a significant amount. It’s unlikely it would be cancelled immediately unless they believe you engaged in fraudulent activities.

Do home insurance rates increase after a claim?

You could see an increase in premiums after filing a claim. However, it should not affect your renewal if you have a clean record and have not filed within the last five years. However, this can vary depending on your insurance provider.

Claims 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.

Can you keep home insurance claim money?

While you are supposed to use the money to make repairs and replace damaged items, you are free to use it as you wish. However, it is advisable to use the money for its intended purposes – to restore your home to its state prior to a loss.

How you receive the settlement depends on your preferences, situation and how your insurer processes them. Some people choose to take funds and pay contractors directly. Others choose to have the insurers pay contractors directly for repairs.


Home insurance claims FAQs

While there is no set number, the fewer, the better. In most cases, one every 5 years is an acceptable amount. Too many could result in your policy not getting renewed. Many insurers will not renew home insurance with a history of claims. Speak with an advisor if you are having issues getting insured.

False claims and insurance fraud are leading factors for rising costs. It could be denied if you are caught providing deceptive information or purposely misleading insurers, and your policy will be cancelled. Exaggerating or inflating the extent of a situation is a crime. Your insurer could also press charges against you.

Some people may have difficulty changing providers after. Having a fresh claim on your record is not the best time to shop around. Working with an advisor is your best option to explore your options.

ThinkInsure has you covered if you need to make a claim

Contact us if you have questions about the claims process. See our claims services page for 24/7 Emergency Claims Numbers for our insurance partners.

Source

*Home insurance property and premium collected from Ontario ThinkInsure customers from January 1, 2024, to January 1, 2025.