When to File and When to Bite the Bullet

Be Aware of ItHomeowner’s insurance is a wonderful thing to have, and can be a lifesaver. But its effectiveness and affordability rests greatly on your ability to know exactly when to use it, and when not. Many homeowner insurance companies view your claim history and the frequency with which you file claims as a benchmark to determine what your monthly premiums will be. Sometimes, filing a claim when it’s not necessary could only serve to increase the amount you pay. Here are a few tips to help you know when filing an insurance claim is in your best interest, when it’s not, and how it can affect you in the eyes of most home insurance companies.

When should I file an insurance claim?
Deciding on whether or not to file an insurance claim may sound like tricky business, but it’s actually not. It’s just a matter of common sense. You should consider filing an insurance claim if you find yourself in any of the following scenarios.

  • If the damages aren’t your fault and you know they’ll be covered. For this reason, it’s important to always have a copy of your homeowner’s insurance policy that you can reference at a moment’s notice.
  • If you haven’t filed an insurance claim in several years. The facts are, homeowners who file frequent insurance claims are considered greater risks and are therefore charged more for their insurance premiums.
  • If the damages are substantial. Determining this might not be as simple as it sounds and often requires a professional estimate. If the dollar amount of the necessary repairs far exceeds your deductible, file an insurance claim.

When should I not file an insurance claim?
There’s a time to file, and a time to pay out of pocket. Knowing the difference may cost you a bit more now, but could save you a lot of money in the long run. You should consider not filing an insurance claim if your circumstance meets any of the following criteria.

  • If you know the damages won’t be covered by your insurance policy. For instance, if your roof springs a leak as a result of some poking around in the attic that you shouldn’t have been doing, don’t bother filing a claim. Keep a copy of your insurance policy handy nonetheless to determine what will and won’t be covered.
  • If the estimated damages are less than your deductible. This means that if your deductible is $1000 and the cost of repair is $500, there’s no sense in filing a claim.
  • If the estimated damages are equal to or close to your deductible limit. Think it over. If your deductible is $1000 and the total cost to pay for repairs on your own are going to run $1500, you might be better off handling it yourself and not filing a claim. Filing a claim could save you $500, but will cause your monthly payments to increase significantly.