Hidden “Costs” to Home Claims

Way back when I was a kid, I remembered hearing adults throw around the phrase “It’s okay. I’ve got good insurance.” As an agent now with 28 years of experience, I’ve seen countless claims that could’ve been avoided but the insured definitely thought “it’s okay. I’ve got good insurance.” Problem, in retrospect there were always many reasons to do everything possible to avoid that claim!

1. The top one in my opinion is the shear inconvenience of it all… Not only is your home and your life affected by the damaged area, you also have to deal with adjusters to get things paid, and, worse yet, contractors walking through your house day after day until the repairs are complete. It’s never fun and, ask anyone that’s been through it, even though it isn’t dollars being spent, it sure feels like a cost of having a claim…
2. Sometimes not everything is covered. Your policy could have limits for certain parts of the structure or different types of damage. Blindly trusting that ‘everything is covered’ is bad advice. Reading the policy isn’t as fun as playing video games but it will show you many reasons why being proactive and protecting your property is a good idea.
3. After a claim, your premiums will probably increase. It’s not that the carrier is “trying to recoup their costs,” the next renewal gets rated differently. Customers with a clear claim history are less likely to have a claim. So when you add a claim to your history, it’s no longer clear! Think of it like a claim free discount (many carriers actually call it that, by the way).
4. Denial… What if it’s denied?!!! Now you have a claim open, you’ve still got damaged property, and you’re finding out that they aren’t going to cover it! Now, claims don’t just get denied because the carrier doesn’t want to pay them… they have to have a reason that is well explained in the policy contract. Yet, it still happens a lot. You need to understand what is covered and what is excluded and when you do, you would probably never file a claim that was about to be denied.
5. Finally, the most obvious one is your deductible. Every homeowners policy has one. This is the part that might surprise you, though… Make your deductible bigger! For all of the reasons listed above, why not do everything you can to avoid a claim… including, stop the temptation to turn in small ones. After all, if you had a large deductible, would you be more likely to unplug the curling iron and lock the garage on your way out?

Of course, every home is unique as is every individual’s budget situation. Set aside some time to talk to your agent about the risks at your home and choose a deductible that works perfectly for you. We’re here to help. An ounce of prevention is worth a pound of cure! Be proactive, reduce risk, and you’ll reduce your costs dramatically over time.