Say you’ve been paying home insurance since you moved in 5 years ago. The average homeowner’s insurance is anywhere between $500-$2000 per year. Maybe you pay $500 a year. As an example, say a big windstorm causes part of your fence to blow down, which will cost $950 to fix. Your deductible is $500 for a claim, which leaves the insurance company to pay $450. The claim is not worth much more than the deductible, and in this case it’s worth more to pay for the damages out of pocket. This is because the average homeowner’s policy can increase as much as 33% or more after a claim has been made. This means, your policy would increase $165 a year, which will end up costing you more than the claim would have within a three-year-span. Also, if you own more than one property, having one claim or more on your record could make you subject to a surcharge on all of your policies.
If you had to file another claim, it may increase your insurance further, or cause you to be non-renewed. Always consider the amount of your deductible versus the total the claim will cost before you decide whether to file a claim.
Remember, your claims report plays a big role in the cost of your homeowner’s premium. It’s important to always call your insurance agency and ask questions before filing the claim.
Insurance professionals will never discourage a client from filling a claim. We just want to make sure you are properly advised.