Homeowners insurance, what’s covered and what to consider when making a claim.
Most policies will cover you for losses or claims as a result of a sudden and direct loss from perils such as:
- Theft and Vandalism
- Fire and Smoke
- Hail and Wind damage
- Falling Objects
- Water Damage (with exceptions)
These are few of the most common items that your policy will protect you from. Most policies also have specifically excluded perils, meaning that you will not have any coverage for any excluded peril. For example, flood and earthquake coverage is normally excluded from a typical Homeowners Insurance policy. If you were in need of either of these coverages you would need to purchase a separate policy for these types of coverages.
How much coverage do I have on my policy and where can I find this information?
When your policy is issued and/or renews you should receive policy documents. More specifically you can find your coverage information summarized for you on the Declaration Page, one way to think of this is to think about the page of your insurance that DECLARES your coverage.
On your declaration page you should see the following coverages listed:
*Coverage A and/or Dwelling Coverage Amount-This is the what is calculated to be the cost to rebuild your home from the bottom up if it was a total loss.
*Coverage B and/or Other Structures Coverage-This covers any other structure on your property that does not share the same roofline-sometimes referred to as appurtenant structures.
*Coverage C and/or Personal Property Coverage-This covers your personal belongings such as your furniture, appliances, clothing, dishes and linens.
*Coverage D and/or Loss of Use-This offers you coverage if you suffer a covered loss and your home is not habitable or livable while it is being repaired or rebuilt.
*Liability Coverage-Liability coverage for your home offers coverage for you against lawsuits for injury or property damage that your or your family members or pets may cause to another person.
Now what to consider when filing a homeowners insurance policy claim:
Your deductible amount
Check your declaration page to see what the amount of your deductible is. Remember that this amount will be deducted from any payment that the insurance carrier issues to you at the time of the loss. For example: Your home was broken into and you had items stolen from your home and damage to your front door, totaling a loss of $1300 but you have a $1000 deductible, meaning after your deductible is applied you potentially get a claim payment of $300.
Your rates can increase after a claim
As a whole it is a good rule of thumb to know that your insurance will most likely increase some at the next renewal term. Often times agents are asked how much will it increase. There is really no way to know the answer to this, it can depend on the time of the claim and how much is paid out etc. But in most cases when you turn a claim in you will see an increase in premium in the next policy period.
How long does a claim follow me?
Most insurance companies subscribe to a national database-often times called CLUE or Comprehensive Loss Underwriting Exchange. This means that any time you file a claim the information about the claim, the location of the claim, the insurance carrier at the time of the claim and the total amount paid out. This info will follow you around and be taken into account for about 5 to 7 years on the average.
Claims are time sensitive
Often times there is a time period in which a claim can be turned in, in order for it to be a viable claim. One example would be a water damage claim, most Insurance companies have a time limit in which they need to be turned in order to offer coverage. If it is a loss that is prolonged over time, and no action has been taken it has the potential to be denied by the insurance carrier. If you discover an issue and you think you need to turn a claim in, you should act quickly and get it turned in immediately.
Wear and tear, or lack of maintenance is not considered a sudden direct loss
Homeowners insurance policies do not cover a run of the mill maintenance issue. Meaning that any claim submitted that is a result of failure to upkeep or maintain will most likely be denied.
Overall, exercise caution when turning a claim
If your claim barely surpasses the deductible, it may not be worth turning in. Filing frequent claims can appear as higher risk, and may jeopardize your ability to obtain insurance for your home. That being said if you lost your home to a fire and all the contents within it, this would be hard to recover from without having an insurance policy to rely on and help get you back to where you were prior to the loss. Homeowners insurance is necessary and is there for situation just like that, however it is good to weigh the pros and cons and decide when to turn a claim in and when not to.
If you have a claim question, feel free to call us at 530-674-5054. Oakview Insurance Services, Inc. is Yuba City’s premier homeowners insurance agency.