Should I file a claim on my home insurance or not?

One question we often get asked at Chrinco is whether or not the homeowner should file a claim on their home insurance for a small loss.

The short answer is – it depends.

There are several factors to consider before filing a homeowners insurance claim.  First, how high is your deductible.  We have had many people inquire about filing a claim on a small $1000 loss only to find out that their deductible is $2500.  Obviously in situations such as these, filing a claim is fruitless as the claim will most definitely be denied.

Second, consider is your claim history.  How likely, or unlikely, you are to file a claim can make a difference with not only your insurance rates but also with your ability to secure coverage with a top-rated carrier.  If you have been using your insurance for small claims, there will come a time when your insurance company will either raise your rates or non-renew your policy.

One thing to take note of…

If you do file a claim, whether the claim is denied or not, be prepared to receive a poorly worded letter from the carrier stating that they need proof of the repairs or they will non-renew your policy.  This is always a disconcerting letter for the homeowner to receive.  And it is these situations where we typically hear stories of people saying “I was with XYZ Insurance for five years; I filed one claim and they said they were going to drop me.”  While you most likely won’t be dropped for filing a single claim, always take photos of the repairs and keep receipts as your insurance carrier will most likely request them prior to your next renewal.

And a rule of thumb…

The decision to file a claim is completely up to the homeowner.  Our rule of thumb here at Chrinco is this – is the loss at least double your deductible?  If it is, file the claim – if it’s not, pay out of pocket.  So if you have a $1000 deductible and have $1100 in covered damages – you may want to consider just forking out another $100 and avoid the run-around with your insurance company.  However, if the covered damages are $2000, you may want to consider filing a claim.  In the latter situation, you’d pay $1000 and your insurance company would pay the remaining $1000.

For a helpful tip to lower your homeowners insurance rates, check out this post.

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