• When to file a Homeowner Insurance Claim?

    When to file a Homeowner Insurance Claim?

    Homeowners’ insurance and car insurance have one thing in common: the importance of weighing when to file a claim and when not to, and carefully considering how doing so might affect your premium and pocketbook in the long run. Never assume your homeowners’ insurance will cover what you think it will. Know your homeowners’ insurance policy and what your homeowner’s policy covers.

    Home insurance claims stay on your Comprehensive Loss Underwriting Exchange (CLUE) report, which contains up to seven years of claims history and helps insurance companies judge how likely you are to file another claim. If you rack up one too many, insurers can void your policy if they think you and your home carry too much risk. You may also be surprised to see a hike in your premium after filing a claim even if the cause of the claim is due to an unexpected or accidental incident — exactly what home insurance is meant to protect against.  

    The unfortunate reality is that just because you pay for home insurance does not mean your insurer is obligated to help pay for fixes whenever you need them. Knowing when not to file a claim will save you from future headaches, more expensive premiums, and surprise policy non-renewals.

    When you should NOT file a home insurance claim

    Be aware of how claims on your record will affect your homeowner’s insurance premium, and you’ll be happier you didn’t file an unnecessary claim. Here are the instances in which it would not be wise to call up your insurer.

    1: The cost to repair or replace does not exceed your deductible

    The same logic in whether or not you should file a car insurance claim also applies to home insurance: if your deductible is less than how much it would cost to repair the damage, it makes more sense to pay for it out-of-pocket instead of facing an increase in your premium. As a general rule, don’t sweat the small stuff, and don’t involve your insurance company for minor fixes.

    2: It’s a maintenance issue or normal wear-and-tear

    If there’s something you could have done to prevent the damage, insurance likely will not cover it. It’s the homeowner’s responsibility to care for basic upkeep and maintenance, so wear-and-tear in your home will not be compensated for by your insurer even if it ends up destroyed after a covered loss. If your roof or fence is already damaged and worn after years of neglect, and it collapses after a heavy snowfall, the insurance company will deny the claim because it could have been prevented had you kept up with maintaining your property.

    3: You’ve filed a claim within the last three years

    Insurance companies get flighty if they look at your claims history and see more than one claim filed within the past couple of years — even if it was never paid out, and it was denied or unresolved. Filing a claim when you already have a few under your belt risks getting your policy non-renewed or voided, and you may even have trouble getting coverage elsewhere.

    Excessive Damage to property exceeding your deductible.
    Excessive Damage to property exceeding your deductible.

    When you should file a homeowners insurance claim

    So, what should homeowners’ insurance be used for? As a rule of thumb — bigger losses following a peril that damaged your property.

    1: The cost to repair or replace exceeds your deductible

    Disaster strikes and part of your roof has caved in. The estimate for repair is $5,000 and your deductible is $1,000. It would be prudent — and worth it — to file a homeowners’ claim with your insurance company to get it fixed. If it’s an expensive repair or replacement to fix your home, and it was caused by a covered loss, it makes more sense to get your insurer involved to help pay for it.

    2: There’s significant damage or a total loss

    This is primarily what homeowners’ insurance is most useful for — when your home suffers a loss so great after an unexpected incident that it becomes uninhabitable. In these cases, you should file a claim to recoup your losses.

    3: It’s your first claim in three years

    As we previously mentioned, insurers take your claims history into account when they decide what to charge for your premium, or whether they should even cover you at all. Statistically — whether for homeowners’ or car insurance — if you’ve previously filed a claim, you’re more likely to file more claims in the future. For insurance companies, that’s a risk they don’t want to be responsible for even if you pay your premium every month. When you do need to file a claim, make sure to space them out as much as possible.


    How to file a homeowners insurance claim

    Policyholders needing to make a homeowners’ insurance claim may be curious about how the system works. Below you’ll find the steps for how to file a standard claim. Keep in mind, however, that your particular situation could make your claims process slightly different. 

    1: Contact your insurance company

    The first step in the claims process is to report the claim to your insurance company — unless your claim is related to a crime such as theft or vandalism, in which case you would first need to contact the police. At this point, your home insurance provider will likely go over whether or not the claim is covered and how long you will have to file the claim. They can also give you guidance on how long it might take to process the claim as well as whether or not the claim will exceed your deductible.

    2: Fill out the proper claims’ forms

    After you have made contact with your insurer about the claim, they will send you forms to fill out detailing the damage. Fill out any claims forms that your insurer sends you as thoroughly as you can. Also, make sure to return them promptly to keep the claims process moving.

    3: Have an insurance adjuster inspect the damage

    In most cases, the next step is to have a claims adjuster evaluate the damage and offer a sum to go toward the cost of repairs. Make sure to be prepared for their arrival by having any receipts or other pertinent information ready. They will likely interview you about the nature of the damage.

    4: Make temporary repairs

    You must stop further damage from occurring before sufficient repairs can be made. Covering a damaged roof with tarps or boarding up broken windows can prevent the damage from becoming worse, which makes the claim more costly to fix.

    5: Make a list of damaged personal property

    The more detailed that you can be in your property inventory the better. The value of your items as well as specific model numbers and dates of purchase can help tremendously. When possible, try to include receipts to make things even easier.

    6: Get estimates for repairs

    Getting an estimate for repairs from a local contractor or appraiser can help to ensure that your insurance company is providing enough money to make the necessary repairs.

    7: Make repairs

    If you have a mortgage lender, they will likely have a say in how the repairs to your home are completed. This means that taking a DIY approach to save money may not be an option. Your bank or lending agency will likely have their name listed on the actual check you receive from your insurer. This is because they have an insurable interest in the property and want to make sure that stays in good shape. Payouts for personal property will be distributed to you at either replacement cost or actual cash value replacement cost or actual cash value, reflecting the level of property damage coverage that you have.

    8: Keep track of additional living expenses

    If you are unable to inhabit the home while repairs are being made, the additional living expenses portion of your home insurance policy. Covers expenses such as lodging, food, and transportation. Keep track of your expenses so that you can be properly reimbursed. 

    Common reasons homeowners’ claims are denied

    Any claim you file will be investigated by a trained claims adjuster for authenticity. However, unless you have a company with a bad reputation for claims handling, it generally shouldn’t be a surprise. Let’s outline the big reasons you can have a denied homeowners claim.

    1: The damage was caused by a non-covered peril

    If the peril (cause of loss) is excluded from coverage, your insurance company will deny your claim — For example, flood damage. If a hurricane floods your basement, you are not going to have any homeowners’ coverage because flood is an excluded peril on every homeowners’ insurance policy. To have this claim covered, you would need flood insurance through FEMA. Other causes of loss, such as mold or water backup, might be covered if you have their coverage endorsements. An endorsement is any change to your policy. In this case, you would need to buy a mold or water backup endorsement to have your claim paid out.

    2: If the damage was intentional or avoidable

    Insurance will not cover any malicious intent. Any damage you intentionally caused to your home will not be covered. Any time you file a claim, the source of loss will be investigated by trained claims adjusters. Meaning, you should think carefully before you file a claim after intentional damage. Furthermore, if the damage was caused by neglect — i.e., avoidable — don’t expect insurance assistance. 

    3: If the damage was caused by wear-and-tear or maintenance issues

    Homeowners’ insurance is designed to cover sudden and abrupt damage. If you had a slow leak in your basement and mold formed, your insurance will not cover it. The same is true for old roofs, flooring, or siding. Any maintenance or wear-and-tear losses are up to the homeowner or a warranty to replace.

    4: If your policy was canceled/inactive at the time of claim

    This one is pretty straightforward. If your policy is canceled on the 1st and you file a claim for damage that occurred on the 10th, your claim will be denied. Even if you reinstate your policy, it’s very unlikely your company will honor your claim. Our best advice: always pay your insurance bill! If you’re getting a new policy with a different provider, do not leave any days without coverage. 

    5: If you waited too long

    Your statute of limitations to file a claim can vary by your company and by your state. If you wait too long, you could have your claim denied.

    6: If the value of damage doesn’t exceed your deductible

    If you’re uncertain of the total cost of damage, get an estimate before you contact your insurance company. Even if you have a zero-dollar payout, this claim can impact your premium.

    What to consider when filing a homeowners claim

    By how much you can expect your premium to increase following a home insurance claim relies on a few variables: your location, the cause of the claim, your claims history, and how much the claims payout cost the insurance company. Theft, fire, and liability claims tend to affect premiums the most, and you can expect your premium to increase by at least 20% if you file one.

    When deciding whether you should file a home insurance claim, weigh whether it will be worth the extra cost over the long run, and consider the potential risks to your home insurance coverage. You don’t want to be caught in a situation where your home has suffered significant damage after a disaster, but you were unable to acquire insurance because of your claims’ history. Knowing when and when not to file a claim will save you more money and keep your status with your insurer more stable and secure for when you need it.

    Article Source 

    This article was originally authored by The Zebra: https://www.thezebra.com. We found this information very informative and wanted to share it with homeowners. Thank you, Zebra for the useful and informative information on insurance claims do’s and don’ts when considering filing an insurance claim. 



    Scary Truth about covering the deductibles.

    In the roofing industry, there are lots of contractors who don’t even think twice when it comes to committing insurance fraud much less considering involving the homeowner in the fraud with them.  Unknowing homeowners are taking part in insurance fraud when they agree to not pay their deductible and follow along with the contractor who claims they will get a roof for free if they just agree to let them do the repairs and cover the deductible.  It sounds honest and simple enough to just deduct the price of the project down from the adjuster estimate discounting the deductible portion.  How is that possible?  How are they able to do that and still make money on the repairs?  Those are two very good questions to ask and if you keep reading I will explain how they do just that and involve you, the homeowner, in a criminal act, INSURANCE FRAUD.   Just giving a customer a discount is not illegal and contractors can offer discounts all they want as long as the project is not part of an insurance claim.  You, the homeowner signed a legally binding contract with your insurance provider lining out the amount of the deductible you will owe if you ever have a claim.  Let me break it down for you how letting the contractor, performing the repairs, covering your deductible becomes a criminal offense punishable by a huge fine and possible jail time. 

      “Discounted “or “free” roofing work (when being funded by insurance companies) is against the law in Colorado. There is no way around it.  Roofers paying for clients’ deductibles, even partially, is illegal in Colorado. It has always been insurance fraud, but our senate has taken it a step further. In 2012, Governor Hickenlooper and the Senate passed Senate Bill 38 clearly specifying that the discounting a roof deductible in any way to be illegal. We have provided a link at the end of this article so you can read the law for yourself.

    Let’s say, you, the homeowner has an insurance claim on your home damaged from a hail storm.  Your roof needs to be replaced.  A door knocking roofer stops by and tells you he will replace your roof and it won’t cost you a dime out of your pocket, sounds pretty good doesn’t it? WOW a free roof???  Not exactly, lets break the claim down and explain how insurance claims work.  Lets say your claim for the roof is $20,000 dollars.  Your deductible is $1,000 dollars so that means the insurance company will be paying for $19,000 dollars of the repairs and the deductible is your portion.  Your insurance has already paid you the ACV ( Actual Cash Value ) of the the roof current market value based on the age of the roof.  Let say the ACV for your roof is $5,000 dollars which you have already received.  The repairs have to be completed and the final invoice sent in before your insurance company will send the second, and final payment of $14,000 dollars, which is the “Depreciation” portion of the claim.  If you turn in the roofers estimate of $19,000 dollars your insurance company will love you for that because you saved the insurance company $1,000 dollars and now all they owe is $18,000 dollars for your roof and your final payment from your insurance company will only be $13,000 dollars.  The only way to not have that happen is to send either a false final balance bill to the insurance company or try to supplement for the difference and bill above and beyond, for work not performed, to cover their discount to you.  Either way it is illegal and insurance fraud which has implemented the homeowner in a criminal act. Refer to the link to read the laws regarding insurance fraud laws to follow when insurance is paying for your repairs.  LINK TO SB-38 LAW IN COLORADO

  • Who pulls the re-roof permit, Homeowner or Contractor?

    Who pulls the re-roof permit, Homeowner or Contractor?

    As a homeowner you are allowed to pull your own permits, however, by pulling your own permit you have to sign documents with the city which state you, as the homeowner pulling your own permit, will be performing all of the work and not paying any contractor to do the work under your permit.  The reason for this rule is to protect the homeowner from unlicensed contractors performing work not in line with current building codes.  The only reason a company would suggest the homeowner pull the permit is that either they do not have the proper license and insurance to perform the roof replacement project or they do not have a license at all.  If an unlicensed contractor performs the work under your permit and there are issues after the fact then there is no recourse and it will cost the homeowner more money in the long run.  It is always best to hire a contractor who has all of the license and insurance required by your county to pull the permits and complete the work so if there are any issues they are liable for correcting those issues.