When to Avoid Submitting a Home Insurance Claim

Although homeowners insurance is available in case your home or possessions are damaged or lost, you shouldn't always file a claim. For example, the premium rise you'll probably see at renewal time may not ultimately be worth filing a claim when the payoff is near your deductible level.

Circumstances in Which You Shouldn't Make A Homes Insurance Claim

It won't be in your best advantage to file a claim if the repair costs you're requesting are close to your home insurance policy's deductible, you have a history of several insurance claims, or your policy doesn't cover the damage. Here are several scenarios where it might be wise to delay making a homeowners insurance claim.

The Claim's Value Is Not Far From Your Deductible

It probably won't be advantageous to you in the short or long term to submit a claim if the cost of repairing the damage to your home is less than or even close to the deductible level of your home insurance policy. It will be expensive to file your claim if it is less than your deductible. You'll also possibly see a premium increase added at renewal time.

Even if the repair expenses are only marginally more than your deductible, the long-term rate increase can still be unaffordable. Consider a scenario where a fallen tree causes $1,500 in roof damage, and you have a $ 1,200-a-year home insurance policy with a $1,000 deductible. Your house insurance will cost you an extra $120 a year if you make a claim, raising your rate by 10%.

Things can become ugly when you consider that a claim remains on your insurance record for five to seven years—referred to as a Comprehensive Loss Underwriting Exchange (CLUE) report. The claim will cost you an additional $600 in premium expenses, even if it only appears on your record for five years. You end up spending more than you would have if you had paid for the damage out of pocket due to the deductible and premium rise.

We advise against filing a claim unless you have no other option given your current financial situation if your claim is less than $3,000 or less than $10,000 for water damage. Your home insurance provider can decide not to renew your policy due to potential mold damage if you have water damage.

In The Previous Three Years, You've Submitted Numerous Claims

Your provider can respond negatively if you've made several house insurance claims in a short period of time. According to the Insurance Information Institute, one in twenty homeowners submits a claim for home insurance each year. Your insurer can view you as high risk if you score higher than that average. At the absolute least, this may lead to increased premiums, and your insurer may decide to drop you when it's time for renewal.

The Harm Was Not An Accident

Possibly, your claim will be rejected if you submit it for neglect-related damage to your roof or to another property component. Your home is specifically covered by home insurance against sudden and accidental damage. The insurer would deem it the homeowner's obligation if negligence brought on the harm.