Homeowners insurance is a necessity regardless of your home’s condition, size, or location. But insurance policies are not the same because risks vary significantly. The insurance protects your property or possessions against damage and may cover damages caused to other people’s properties. But when is the right time to file an insurance claim? Here are some guidelines on the process.
Understand the Insurance Claim Filing Process
Knowing when to file an insurance claim begins with a clear and in-depth understanding of the claim filing process. There are a series of steps to be followed as outlined by the Insurance Information Institute. Start by going through your homeowners' policy which outlines the rules and procedures for you and your insurance company to follow.
If any crime has occurred on your property, report it to the police immediately. Contact your insurance company as soon as possible as there is a set time limit for filing claims. If immediate repairs are necessary, do them to prevent further damage. Create an inventory of lost or damaged property with photographs or a videotape.
Learn the Different Types of Insurance Coverage:
A standard home insurance policy comprises 4 types of coverage:
1. Liability Protection
This protects you against lawsuits for property damage or bodily injury caused by you, your pets, or family members to other people. Damage to your own property is not covered. The policy pays for court costs including any court awards that don’t exceed your policy’s limit. A no-fault medical coverage ensures friends or neighbors injured while in your home.
2. Your Personal Belongings
Your personal possessions are covered if they are destroyed by an insured disaster. If expensive items such as silverware or jewelry are stolen, they are covered up to a certain amount. Plants, trees, and shrubs are also covered against lightning, vandalism, fire, explosion, and falling aircraft. Off-premises coverage is also included.
3. Your House Structure
This pays for home rebuilding and repairs done due to damage caused by disasters listed in your insurance policy. Disasters like hurricanes, lightning, fire, and hail are covered while earthquakes, floods, and natural wear and tear are not. Detachments such as a gazebo, a tool shed, or a garage may also be covered.
4. Extra Living Expenses
This covers extra living expenses you incur away from your home as it gets rebuilt after damage. The coverage may include restaurant meals, hotel bills, and other related expenses. The additional living expenses coverage varies from one company to another.
Remember, Some Claims Might be Worth Skipping
Not all claims are worth filing. Even in circumstances where repair costs surpass deductible levels, be wary of filing certain claims. It’s unnecessary to report water damage below $10,000. During renewal, your insurer may give a cancellation notice on your policy due to mold concerns.
Don’t file claims for non-water damage below $3,000. Your claim is registered in the Comprehensive Loss Underwriting Exchange (CLUE) database and remains there for 7 years. Filing multiple claims in a short time can cause your policy not to be renewed and make it difficult for you to obtain affordable coverage in future.
It’s best to limit claims to once every ten years and to avoid filing small claims. Deliberately find ways to prevent small losses or damages from occurring. When getting homeowners insurance, pick the highest affordable deductible amount. Lastly, always think of home insurance as protection against major losses.
For more homeowners' tips, don't hesitate to contact us!