If you have water damage in your home, should you file a claim? We recommend caution before you do.
According to a recent article, "In a study by the California Insurance Department, 25% of the companies refused to renew the policies of customers who made one or two nonwater-damage claims in the past three years. And 32% refused to renew policies for people who made one or two water-loss claims in the past three years."
Carefully consider the following before filing a homeowners claim:
WILL IT BE COVERED?
Your insurance carrier will only pay for damages if the cause is a covered peril, and the damages are higher than your deductible. Find out what caused the damage, and how much it will cost to repair by getting an estimate. Flood and earthquake losses are never covered under a homeowners policy. Do NOT file a claim for a peril that is not covered, they require separate policies.
Losses that are not covered also include wear & tear. For example, in the event of a roof leak, the water damage could be covered, but if the roof is worn out due to normal wear and tear, the roof repair would not be covered. Faulty workmanship, poor maintenance, and floods are not covered. Remember, flooding is only covered by a flood policy. A flood is defined as an intrusion of ground water due to pooling of water from the exterior of your home. Repeated water loss, such as drips that occur over a 30 day period are also not covered,
IS IT WORTH FILING A CLAIM?
If the damages are lower than your deductible, not only will your loss not be covered, if you file that claim, it will be on your record for years, and will follow you if you try to move to another carrier. Even when no money is paid out, the fact that you filed a claim can be a strike against you. From the same article, "Insurers share claims information with each other through a database called the Comprehensive Loss Underwriting Exchange (CLUE), and other insurers may not want to insure you after you've had a few small claims."
Filing a claim means you lose your "Claim Free" or "Loss Free" discount, and your premium will increase for as long as seven years. Consider raising your deductible to $2500 or higher to save on premiums, and take care of small repairs yourself. Filing multiple claims also makes it more likely you will get a non-renewal notice from your carrier.
GET ADVICE FROM YOUR LOCAL AGENT
Finally, as your local agent, we are just a phone call away. Before you file a claim, contact us first, we would be more than happy to advise you.