Home insurance claims can feel intimidating, even to long-time homeowners who have been through the process before. What can you expect? What will they ask you? What information will they require?
While every insurance company’s claims process will differ slightly, there are fundamental similarities across the board. That’s why this blog outlines what you can typically expect when making a home insurance claim, from beginning to end.
What is a home insurance claim?
A home insurance claim is an official request you submit as a policyholder to your insurance company when a covered peril occurs that you want to receive compensation for. If approved, home insurance claims are covered by everyone’s monthly premiums, which are pooled together and used by your insurance company to pay for damages and other costs associated with a claim.
Remember, you can only make home insurance claims for perils that are explicitly stated in your policy documents and that are sudden and unpredictable in nature, meaning there was nothing you could have done to prevent it from happening. For example, if a fire breaks out and destroys your kitchen or someone breaks in and steals thousands of dollars worth of your personal belongings, you would likely make a claim.
But suppose your roof gradually deteriorates over time due to normal wear and tear. In that case, you won’t likely be able to make a home insurance claim for it because wear and tear is considered a maintenance issue, which is not covered by most home insurance policies in Canada. So, while you can rely on insurance for unexpected events like fires or burglaries, remember that routine maintenance and gradual deterioration are your sole responsibility as a homeowner, so always budget accordingly.
What to expect when making a home insurance claim
If the worst happens and you find yourself in a position where you have decided that it’s worth it to make a home insurance claim, here’s what you can usually expect to happen.
Expect to provide before and after documentation
Before an insurance company can approve a claim, they need evidence of the damage or loss that occurred, typically in the form of documents or photographs. By providing tangible evidence of the state of your home before and after, you establish the pre-existing condition of your home and demonstrate the extent of the incident. So, have these documents or photos ready before you start the claims process.
Expect to be asked for a home inventory
For the same reason they ask for before and after documentation, insurance companies might ask you to provide a home inventory, which is essentially a detailed list of your personal belongings and their value. Ideally, you would create a home inventory long before you ever need to make a claim, but if you haven’t done so yet, start documenting your belongings as thoroughly and accurately as possible now.
Expect a visit from an adjuster
Depending on the nature of your home insurance claim, your insurance company may send an adjuster to visit your home to assess the damage firsthand. Their job during this visit is to evaluate the extent of the damage, verify the validity of your claim, and estimate the compensation you’re entitled to receive. Once they’re done, they will hand over their findings and recommendations to your insurance company.
Expect to pay your deductible
When you make a home insurance claim, you’ll usually have to pay your deductible first. Your deductible is a predetermined dollar amount agreed upon when you purchased your policy, indicating the portion you’re responsible for paying before your insurance company will cover the rest up to your policy’s coverage limits.
Expect coverage limits
Speaking of coverage limits, every home insurance policy has them so you can expect to encounter them when making a claim. Coverage limits are the maximum amount your insurance company will pay for covered losses or damages. So, if your claim involves high-value items like jewelry, electronics, art, or other valuables for which you haven’t obtained a separate floater insurance policy, it’s reasonable to expect reimbursement for those items to be limited to a certain amount. Those amounts can be found in your policy documents.
Expect depreciation to be a factor
Your home insurance policy may factor in the age and condition of items being replaced, which means you may not receive the full cost of brand-new replacements. Instead, the payout may be adjusted to account for the depreciated value of the damaged or lost items. To confirm whether this is the case for you, review your policy documents and look for terms like “actual cash value” and “replacement cost.”
Expect the claims process to take time
Home insurance claims take time to get fully resolved, especially ones that involve complex circumstances or significant financial stakes. This is because the claims process often requires extensive assessment, documentation, negotiation, and coordination with the various parties involved.
Expect to follow up
From the moment you make a home insurance claim to its approval and eventual resolution, it’s important to take a proactive approach and keep records of all communications. Following up with your insurance company regularly will allow you to monitor the progress of your claim, address concerns, and ask questions.
Expect your premiums to increase
Whether or not your premiums increase due to a claim can depend on everything from the nature and frequency of your claims to your claims history, your policy details, and your insurer’s policies. If they do increase, it’s sometimes because insurance companies associate making a claim with an increased risk of future claims, leading them to adjust your rates accordingly.
Expect to take preventative measures
At the end of the claims process, not only will you likely want to take preventative measures to mitigate the risks of something similar happening again, but your insurance company will want you to as well. In fact, many policies stipulate that homeowners who make a claim must take reasonable steps to prevent additional loss or further damage.