When to file a home insurance claim and how to do it

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Home insurance is designed to help you afford repairs and other costs you normally can’t pay for on your own after your home or other property is damaged or destroyed due to a covered reason. But, just because something breaks doesn’t always mean you need to file a claim. In fact, filing too many claims can be a red flag to your insurance company; if you have a lengthy claims history, you could end up getting dropped from your policy. In general, it’s only worth filing a claim if the potential repairs are significantly higher than your policy deductible. For more minor repairs, you may be better off paying out of pocket. 

What is a homeowners insurance claim?

A homeowners insurance claim is how you can get reimbursed for covered losses in your home or on your property. After a loss happens, you can start the claims filing process in multiple ways, either over the phone, in person with your agent, through your online account or through many carriers’ mobile apps. The process can differ by insurance company, so familiarize yourself with your insurer’s process options after getting your policy.

Filing a homeowners insurance claim under the right circumstances may help you better manage a significant loss, and keep you from shelling out too much of your hard-earned money.

When to file a home insurance claim

Damage occurring to your property does not automatically mean that you should file a claim against your homeowners insurance policy. You should consider factors to determine if filing a claim is the best course for you in the long run.

The estimate is more than your deductible

If the cost to repair damage to your home or the replacement cost of a damaged household item is only slightly higher than your policy deductible, you may want to consider paying these costs yourself. Every time a claim is filed, it is reported to the Comprehensive Loss Underwriting Exchange (CLUE), a national database insurers use to track claim activity. All carriers review this database, and a claim may increase your premiums at your next policy renewal. Having repeat claims, even ones with low insurance payouts, might cause a property insurer to nonrenew your policy. Frequent or repeat claims over time may make you only eligible for high-risk homeowners insurance, which is more expensive.

The damage is covered and extensive

Homeowners insurance is not intended to cover everyday maintenance or minor repair costs. It is designed to cover significant and unexpected, sometimes catastrophic, losses. These are the events that should generate a claim. For example, hurricane wind damage or a fire in your home often result in extensive damage and will typically be the right catalyst for filing a claim.

You have an endorsement for the damage

An endorsement is add-on coverage, providing financial protection for something a standard home insurance policy does not normally cover. Endorsements can even extend coverage limits above what a standard policy offers. These “add-ons” increase your premium, sometimes only slightly, and may even come with a separate deductible.

Jewelry coverage and sewer backup are just two endorsements commonly added to homeowners policies. When the damage incurred is covered by an endorsement, it might make sense to file a claim because these are typically costly repairs.

When not to file a home insurance claim

As alluded to above, there are a number of situations where filing a homeowners insurance claim might not be in your best interest. In these situations, paying the cost to repair damage or replace items yourself when possible can save on premiums and prevent more serious problems with future coverage.

The damage is minimal

Any claim, even a very minor one, may lead to an increase in your home insurance premium. Your insurer will likely deny any repair or replacement costs below your deductible. Claims that have repair costs only slightly higher than your deductible should probably be avoided as your insurer won’t cover much of the claim, and you risk a premium increase.

Your policy excludes the damage

You don’t want to walk right into a problem by filing a claim that you are fairly certain will be denied. Even claims that are denied or have $0 paid out are reported to CLUE and therefore may have a negative impact on the premiums you will pay in the future.

Filing a homeowners insurance claim is not a “nothing to lose” proposition. Do your research on your policy exclusions, and where possible, consider getting the advice of an insurance agent before you file a questionable claim.

The damage is from normal wear and tear

Homeowner insurance policies consistently include “failure to maintain” exclusions which give the carrier the right to deny the claim based upon negligence or lack of maintenance. For example, if you have a seriously damaged and leaking roof that resulted from your failure to replace shingles that led to the bigger problem, your carrier will likely deny your claim.

You have several recent claims

Filing a series of claims within a relatively short time frame can significantly raise eyebrows with underwriters and lead to higher insurance rates or a policy nonrenewal. A homeowner with multiple claims on their record can cause carriers to assume that another claim will likely be filed. This is part of the risk assessment carriers use to determine if a policy should be renewed and whether the rate should change. Even denied claims can be considered a negative factor when insurers determine you have an excessive level of claim activity.

How to file a home insurance claim

It is important to understand how to file a home insurance claim. The diligence adopted in preparing and supporting your claim may impact your chances of full recovery. The process requires a deliberate step-by-step approach:

1. Contact your homeowners insurance company or agent as soon as possible and carefully complete and submit the required claim forms.
2. Gather all documentation that supports the claim, including photos and all receipts for expenditures. Having a completed and up-to-date home inventory can make this process easier.
3. Make temporary repairs immediately, particularly when these will minimize any additional damage, such as with a leaky roof. Keep receipts of any materials you have to purchase like a bucket or tarp, as you will probably be reimbursed for these items if your claim is approved.
4. Prepare for a visit by the assigned claim field adjuster and answer all questions honestly and thoroughly.
5. Obtain replacement, repair or rebuilding estimates from reputable contractors. Working with a contractor that is in the provider’s “network” may make the claims process go faster, especially if a claim for supplemental damage is needed.

Initially, setting up your policy with a homeowners insurance company with positive reviews for their claims experience may be beneficial and improve the odds that you have a good experience when filing an insurance claim.

Frequently asked questions

• How long does it take to process a home insurance claim?
  

  How long it takes to process a home insurance claim depends on several factors. But, according to J.D. Power, the average claims cycle takes about 23.9 days on average. How fast you file the claim after the damage occurs, where your home is located, the severity of the claim and the ability to get materials to repair your home all factor into the time frame. If a natural disaster affects a large portion of your ZIP code, the process could end up taking even longer, especially if your insurer has a big presence in your area. Some insurers are using artificial intelligence to expedite the claims process. After you file a claim, being prompt and thorough when filling out claim forms and providing detailed supporting documentation can help speed up the process. You may have to reach out to the claims department to find out how to make the home insurance claim process faster so it can be completed as soon as possible.

• Do homeowner insurance carriers deny most claims?
  

  Policyholders pay a premium in exchange for financial protection from covered losses. If a homeowners insurance carrier denies a claim, they must be able to support and prove their reasoning. Although home insurance claims may be denied for a variety of reasons, insurers are bound by the contractual agreements of the homeowners insurance policy, including its coverage types and limits, inclusions and exclusions. If a claim is covered, the insurance company will cover the damage up to the policy’s limits. If your homeowners insurance claim is denied, you are within your right to ask questions and dispute the denial or settlement if you believe there is an error in their decision.

• What home insurance companies have the best claims satisfaction?
  

  Amica, USAA, AIG and Erie had the highest scores in the J.D. Power 2024 Property Claims Satisfaction Study. But, studies can only tell you so much. It may also help to chat with neighbors, co-workers or family members to glean their claims experiences.

• Why was my home insurance claim denied?
  

  There are a few reasons why a home insurance claim gets denied. It’s not uncommon for homeowners to file claims for losses they thought were included in their policies; this often happens with water damage. Floods, water backup and sump pump failure are all not covered by a standard home insurance policy without a separate policy or endorsement. Read through your home insurance policy to get familiar with what is — and isn’t — included in your policy.

  A home insurance claims denial could also come down to bureaucracy. You may have missed a claim filing deadline, or maybe you didn’t provide enough details in your initial filing. If your claim is denied, you do have the option of disputing the decision. Check with your state to see if third-party mediation is available to you for free.