If you’re like most people, “homeowners insurance” is one of those adulting things you only think about when absolutely necessary—like when your mortgage lender insists you have it or when something goes horribly wrong (hello, leaky roof!). You hope you never need but are grateful to have when life throws a curveball.
But knowing how your policy works before disaster strikes can save you from even more headaches later. A little knowledge can go a long way in protecting your biggest investment—your home!
How to Make a Homeowners Insurance Claim
First, picture this: you walk into your living room, and there’s water dripping from the ceiling. Panic sets in. But before you start crying over your soaked couch, here’s what to do:
- Document the Damage
Whip out your phone and take photos or videos of everything. Insurance companies love proof, so snap away like you’re auditioning for CSI: Home Edition.
2. Stop Further Damage
If you can, do something to prevent things from getting worse. For example, put a bucket under that leak or call a plumber to stop the water. Just keep your receipts—many policies will reimburse you for emergency fixes.
3. Contact Your Insurance Company
Most companies have apps, websites, or a 24/7 hotline for filing claims. Be ready to provide details like when the damage happened and what caused it (if you know).
4. Meet the Adjuster
Once your claim is filed, the insurance company will send an adjuster to assess the damage. They’ll decide what the insurance will cover and estimate the costs.
5. Wait for Approval
After the adjuster’s visit, you’ll get a breakdown of what’s covered and how much they’re paying. Then you can hire contractors or replace damaged items.
The Good and Bad of Filing a Homeowners Insurance Claim
The Good:
- You’re Covered! That’s the whole point, right? Your insurance steps in and helps you rebuild, replace, or repair.
- Peace of Mind: You’ll finally feel like all those monthly payments were worth it.
The Bad:
- Your Premium Might Go Up: Insurance companies can raise your rates after you make a claim, especially if it’s your second or third in a short time.
- Deductibles Hurt: Remember, you’ll pay your deductible before the insurance kicks in. If you have a high deductible, it could feel like you’re footing most of the bill anyway.
- Denials Happen: Not everything is covered. If the adjuster decides the issue was caused by “wear and tear” or something excluded in your policy, you’re out of luck.
12 Tips to Avoid Surprises and Make Better Decisions
1. Not Everything is Covered
Your standard policy covers a lot, but not everything. Here are some common exclusions:
- Floods: You’ll need separate flood insurance if you live in a flood-prone area.
- Earthquakes: Same deal—earthquake coverage is a separate policy.
- Wear and Tear: Insurance doesn’t cover maintenance issues or neglect. If your roof caves in because it’s 30 years old and you’ve ignored it, that’s on you.
2. Your Policy Has Limits
There’s a cap on how much your insurance will pay for specific categories, like jewelry, electronics, or fine art. If you’ve got valuable stuff, you might need to add a “rider” (extra coverage).
3. Replacement Cost vs. Actual Cash Value
When insuring your belongings, you’ll choose between:
- Replacement Cost: This pays for what it costs to replace the item today, no matter how old it was.
- Actual Cash Value: This pays what the item was worth, factoring in depreciation. Spoiler alert: It’s usually way less than replacement cost.
4. Bundling Can Save You Money
If you bundle your homeowners insurance with your auto or life insurance, many companies offer discounts. Always ask about this when shopping for policies.
5. You May Need Extra Liability Coverage
A standard policy usually includes liability protection, but if you have a trampoline, pool, or a dog breed considered “high risk,” you might need more. Umbrella insurance can add a layer of protection for lawsuits.
6. Home Improvements Can Affect Your Coverage
Big upgrades, like finishing a basement or adding a deck, can increase the value of your home—and your insurance needs. Always let your insurer know about major renovations to ensure you’re fully covered.
7. Credit Scores Matter
Many insurance companies use your credit score to set your premium. A better credit score can mean lower rates, so keeping your financial house in order can help you save on insurance.
8. Document Your Stuff
Before disaster strikes, do yourself a favor: create a home inventory. Walk through your house with your phone, recording everything. List items and their approximate value. This will make filing claims much easier and faster.
9. Deductibles Are Flexible
You can adjust your deductible to balance monthly costs and potential claims. A higher deductible means lower premiums but more out-of-pocket costs if you file a claim. Choose what works for your budget and risk tolerance.
10. Ask About Discounts
Insurance companies offer discounts for:
- Installing a home security system
- Having a new roof
- Being claim-free for a certain period
- Being a member of certain professional organizations
Never assume you’re getting all the discounts you qualify for—ask!
11. Review Your Policy Annually
Life changes, and so do your insurance needs. Got married? Bought expensive new gadgets? Had a kid? Check in with your insurance company to make sure your policy keeps up with your life.
12. Beware of Small Claims
Filing too many small claims can raise your premiums or even get you dropped by your insurer. Sometimes, it’s better to handle minor fixes out-of-pocket to avoid a rate hike.
What Happens if You Switch Insurance Companies?
Switching your policy sounds like a hassle, but sometimes it’s the smartest move—especially if your rates have skyrocketed or your current company isn’t cutting it. Here’s how it works:
1. Shop Around
Look for quotes from other insurance companies. Pay attention to coverage limits, exclusions, and deductibles, not just the price. Cheap policies can cost you later.
2. Overlap is Key
Make sure your new policy starts before your old one ends. A lapse in coverage could leave you vulnerable—and most mortgage lenders won’t tolerate it.
3. Notify Your Old Insurance Company
Let them know you’re canceling, and ask for a refund if you paid ahead. Be clear about the end date to avoid coverage gaps.
4. Prepare for Questions
Your new insurer might ask if you’ve filed claims in the past few years. Too many claims could make you seem “high risk” and impact your premium.
Heads-Up: If you’ve just filed a claim and then switch companies, the new insurer might charge you more. Why? Because claims history generally follows you. It’s like a credit score but for your house.
By Admin –
