What you need to know about home insurance claims
Having home insurance is one of the most important aspects of owning a home. While it may be more fun to think about the light fixtures you’re going to install in the dining room or how you’re going to get that deck ready for barbecue season, home insurance protects you, your home, and your family in case things go south. Let’s say that new fixture singes your electrical wire, or you got too carried away with grilling that steak and accidentally caused a small fire on your new deck. Without home insurance, you’d have to pay for those damages out of your own pocket.
But you should put a lot of thought into your situation before filing a claim. The thing about insurance claims is that they stay on your record, and every claim you make—especially larger ones—makes you seem like more of a risk to insurance providers and can affect your monthly premiums.
How do home insurance claims work?
Home insurance claims are covered by everyone’s monthly premiums, which are pooled together and used by the insurer to pay for damages and other costs associated with a claim. When you make a claim, you’ll usually have to pay your deductible first, which is a certain dollar amount you have to pay out of your own pocket before your insurance covers the rest.
How to file a home insurance claim
While every insurance provider is a bit different, the process of filing a claim is usually pretty straightforward. If a crime has occurred, such as a break-in or an act of vandalism, you should file a police report as soon as possible before contacting your insurance.
In every other case, you should contact your insurance and let them know what has occurred. Document as much as you can, via pictures, videos, and written notes. Keep all of this documentation until your insurance confirms they don’t need it anymore. Keep a detailed inventory of what belongings have been damaged, lost, or stolen, and share that with your insurance. They will then advise you on hiring cleaning companies and contractors and how to get reimbursed for their services. Once the damage has been fixed and you’ve been compensated on the agreed-upon coverage, your insurance will close the case.
What to do before filing a home insurance claim
If you do need to make a home insurance claim, here’s what you should know beforehand:
Carefully read your policy
We get it. The fine print on those insurance policies can be longer than War and Peace. But it’s important to at least understand fully what is and isn’t covered in your policy. That way, you won’t get a nasty surprise when you’re trying to make a claim and discover that you’ll have to pay for the damage out of your own pocket.
It’s important to remember, for example, that most home insurance policies don’t cover damage from floods or earthquakes. It’s also important to know exactly what kind of coverage you have: basic or comprehensive coverage. Basic coverage only covers events that are specifically named in the policy. So if a basic coverage policy says they cover theft, vandalism, personal liability, wind, and fire damage, then that’s what you’re insured for, and no more. Comprehensive coverage covers everything except for what’s specifically mentioned in the policy. So if the policy says it won’t cover damage caused by vermin infestations, hurricanes, or snowstorms, then you can be sure that everything else will be covered.
Create a home inventory
Having a home inventory is a vital part of ensuring that you’re properly covered and that your belongings are replaced as close to their original value as possible. Depending on what incident you’re reporting, your insurance will also require an inventory to assess how high the damage is. So if a pipe burst in your basement and ruined loads of clothes, sporting equipment, and other items you were keeping there, a detailed home inventory list with approximate item valuations will allow your insurance to act faster and more efficiently.
Get quotes from different contractors
In most cases, you’re in charge of hiring contractors or cleaning companies in order to take care of the damage or conduct any repairs. You’ll then be compensated for the costs by your insurer. However, you should still try to get a couple of quotes from contractors, even if your insurer suggests a specific contractor.
Document all damages and don’t rush to remove damages
Extensive documentation is key when filing a claim. Take photos, and videos, and take many notes at the moment, as memory can be faulty and leave out key details. In an ideal scenario, you’ll also have some sort of “before” and “after” picture documentation to show your insurer the extent of the damage.
If you’re currently dealing with a massive mess, it may be tempting to clean everything up as soon as possible. But you shouldn’t rush to clean everything up until everything has been sufficiently documented. You should also keep all receipts for cleanups and not throw away damaged items until everything is recorded.
Keep records of all communication
An extensive and thorough paper trail is key when filing a claim. Any conversation between you and your insurer, contractors, or any other involved parties should be in writing and kept somewhere accessible. By keeping track of all communication and always being as detailed as possible, you’ll be protecting yourself against any possible misunderstandings or discrepancies while the insurer evaluates your claim.
Think carefully before filing a claim
Every claim is a strike on your record. When trying to buy insurance, insurance providers will look at how many claims you’ve made in the past. The more claims you’ve made, the higher they’ll set your monthly premiums. This is because they’ll consider you to be a higher risk. So before you decide to file a claim, make sure it’s truly necessary. Is the damage small enough that you could take care of it yourself without any major financial strain? If so, then you should consider skipping the claim and only file one when the damage is truly substantial.
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