If you came home to find something amiss, like a burst pipe or a broken front window, would you immediately file an insurance claim?

It’s important to fully understand the situation (and the potential loss) first. Filing claims can increase your premiums and even make it hard to get coverage in the future, so smaller claims may not be worth the trouble.

Ask yourself these three questions before taking action: 

1. How much have I lost?

First and foremost, calculate the costs of the damage. If your garage is broken into and your family’s bicycles are stolen, for example, it might cost you $2,000 to replace them. 

Now, consider a different scenario where your garage is heavily damaged by a fire. A quick online search tells you the average garage costs more than $26,000 to build.

2. What’s my deductible?

Let’s say your deductible is $1,000. If you file a claim for a $2,000 burglary, the insurance company will subtract your deductible and pay you the remaining $1,000 of your loss. 

What about the garage fire? In that case, your insurer would cut you a check for $25,000.

3. Can I pay for the loss myself?

You have homeowners insurance for a reason, but if the claim is smaller than your deductible or if you’ve recently filed one or more claims, you might want to consider covering the costs yourself if you’re able to.

Note: You’ll also be responsible if the damage is related to a lack of proper home maintenance on your part.

The Takeaway

Filing a homeowners claim makes the most sense with significant losses you can’t cover out of pocket. 

One possible way to cushion your savings to pay those smaller claims is to raise your deductible, as this can lower your premiums.

Have questions about your policy? Need to change your coverage? Reach out anytime.