Your home is probably your biggest investment, so it makes sense to protect it with homeowners insurance. But knowing when to use that insurance can be tricky. Let’s talk about when you should (and shouldn’t) file a claim.
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The Balancing Act
Filing a claim isn’t always the best move. You need to weigh the immediate benefit of getting repairs covered against potential long-term effects on your coverage and premiums. Too many claims can make it hard to get insurance in the future, or lead to higher costs.
Your Claim History Matters
Insurers keep track of your claims for up to seven years in something called a CLUE report. If you file too many claims, insurance companies might see you as high-risk and either raise your rates or refuse to cover you altogether.
When to File a Claim
- The damage costs way more than your deductible
If the repair bill is significantly higher than what you’d pay out of pocket, it’s probably worth filing a claim. - Major damage that’s covered by your policy
Insurance is there for big, unexpected disasters. If your house catches fire, for example, that’s exactly the kind of situation where you’d want to use your insurance. - You have special coverage for the damage
If you bought extra insurance (called an endorsement) for something specific, like sewer backup, and that’s what happened, go ahead and file a claim. - It’s been a while since your last claim
If you haven’t filed a claim in three years or more, you’re in a better position to file one now without raising too many red flags.
When to Skip Filing a Claim
- The damage isn’t much more than your deductible
If the repair cost is only a little bit more than what you’d pay out of pocket anyway, it’s usually not worth filing a claim. - Your policy doesn’t cover it
Read your policy carefully. If the damage isn’t covered, don’t bother filing a claim. Even denied claims show up on your record. - It’s just normal wear and tear
Insurance doesn’t cover stuff that breaks down from regular use. That’s on you to maintain and fix. - You’ve filed a claim recently
If you’ve made a claim in the last three years, think twice before filing another one. It could put your coverage at risk.
Quick Reference Guide
Here’s a handy table to help you decide:
| Situation | File a Claim? | Why? |
|---|---|---|
| Repair cost is way more than deductible | Yes | Insurance will cover a lot of it |
| Repair cost is a little more than deductible | No | Premium increase might not be worth it |
| Major disaster (like a fire) | Yes | This is what insurance is for |
| Minor damage, costs less than deductible | No | Insurance won’t pay, and it could raise your rates |
| Damage not covered by policy | No | Claim will be denied, but still on your record |
| Normal wear and tear | No | Insurance doesn’t cover regular maintenance |
| First claim in 3+ years | Yes | Less likely to raise red flags |
The Bottom Line
Insurance is there to protect you from major financial hits, not to cover every little thing that goes wrong. Before you file a claim, think about:
- How much the damage will cost to fix
- What your deductible is
- When you last filed a claim
- Whether your policy actually covers the damage
If you’re not sure, it’s always a good idea to talk to your insurance agent. They can help you understand your policy and make the best decision for your situation.
Remember, taking care of your home with regular maintenance can help prevent a lot of problems in the first place. That way, you’re less likely to need to file a claim at all.
Stay smart about when you use your insurance, and you’ll keep your home protected without breaking the bank on premiums. Good luck!
Disclaimer: This was written by Legal Grit, homeowner insurance disputes lawyers in South Florida.