Should I File an Insurance Claim?

Should I File an Insurance Claim?

In 2013 4.8% of insured homes filed an insurance claim for coverage with an average claim severity of $10,271.00 These figures are averages for all property damage claims ranging from fire, lightning, wind, hail, and water damage. Below is a list of considerations every homeowner should make before filing an insurance claim.

  • Protect your premium:  Don’t call your insurance company without first considering how much the damage will actually cost.  Even though you have coverage for a specific occurrence does not mean its a good idea to call your insurance company.  Your premium is determined by several factors such as your location, loss history, building type, proximity to fire hydrant, credit score, to name just a few.  Any time that a claim can be reasonably avoided you would be wise to make the repairs yourself or pay out of pocket.
  • Get a “CLUE“: CLUE (Comprehensive Loss Underwriting Exhange) is database of personal property information that is collected and relates to claims on private property.  Think of CLUE as a “credit report” of sorts as it relates to just how risky of a person you are.  Every claim you file (even the ones that are never paid out or denied) is collected in this database and helps your insurance company determine your premium renewal amount.  Your CLUE history will follow you to your next insurance company should you decide to switch carriers’.
  • Choose your words wisely: Once a claim number is assigned it becomes part of your claim history irrespective of its outcome.  This means that even if your insurance company denies coverage, offers partial coverage only, or pays the claim out in full it will have a similar effect on your future premiums.
  • Exterior Damage:  If your area experiences hail or wind damage don’t automatically assume that your house was damaged-even if you see your neighbor replacing siding and roofing.  BEFORE you call your insurance company have your roof professionally inspected by a local contractor. With todays technology it is more than reasonable to ask any contractor you are considering working with to show you photos of the damage.  Most roofs are capable of withstanding small hail events and won’t require replacement.

So with the above considerations when DOES it make sense to file an insurance claim? We’ll stay away from specific dollar amounts as this will vary throughout different regions of the country but below is a small list of considerations that you should ask yourself:

  • The damage requires permitting or several different trades in order to make the repairs and will require a specific order of operations’.  Unless you are a General Contractor or well versed in home repairs you probably don’t have time to handle all of the scheduling and challenges that will present themselves.
  • Cleaning up water damage can prove extremely difficult depending on the extent of damages.  Often times homeowners will think they got all the water up only to find buckling hard wood floors a month or so later.  If water has presented itself between floors, under cabinets, inside of walls, etc. its probably better to leave the dry-out to a licensed professional.
  • Often times after a fire or smoke event soot and oil has worked its way through your duct work, walls, inside cabinets, etc.  This is going to require the use of specialized chemicals and equipment beyond your average homeowners’ knowledge.

Insurance is there as a potential backstop offering homeowners’ peace of mind in the event of damage to their home.  However it is a business proposition and your carrier will base premium price based on your location and your risk history.  This article is not intended to disway anyone from using the product that they have paid for over the years only to shed some light into different considerations.

About the Author

Built Restoration and Construction Services is a full service insurance restoration contractor located in Charlotte, NC.  We have estimated 6M+ in insurance claims over the last 10 years.Carriers we have written for include USAA, Nationwide Insurance, Kemper, Amica, and State Farm.

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