Home ownership by nature comes with many costs. Insurance is meant to cover you in the case of significant financial loss due to unforeseen events. Policy owners should know when to file a claim and when not to: it is a balancing act. Here are some things to consider when deciding whether or not to file a claim.
The cost should be more than a few hundred dollars above your deductible.
Submitting a small claim is usually not worth it. If your deductible is $2000 and the damage costs $2,300 to repair, you would be further ahead to come up with the additional $300.
An exception to this would be if there might be long-term repercussions from the damage – if you incur damage that has the potential to cause significant future claims, you should file a claim now. If you wait until future damage has occurred, you will likely be denied. Your local insurance agent can help you make this decision.
Are you certain that the loss is covered?
Even if a claim is denied it is still reported on the Comprehensive Loss Underwriting Exchange (CLUE). The CLUE, like a credit report for your insurance claims, contains up to 7 years of claims.
Has it been more than 3 years since your last claim?
Unless there is significant damage or a total loss, you should not file a claim if you have filed one in the past 3 years. This will make insurance companies wary of insuring you.
Filing a claim often results in a premium increase and filing too many claims can cause your insurance to be dropped and even hinder your ability to obtain insurance coverage in the future. If you are unsure whether to file a claim, your independent agent is an invaluable resource in helping you navigate these decisions.