Insurance is there for you when you need it. It’s the umbrella, the safety net, the fail-safe. But it’s wise to consider the alternatives before actually tapping your insurance company for help: Every claim you file can raise your premium. If you file too many claims, not only can your insurance company refuse to renew your policy, but you may also have a hard time finding good coverage elsewhere.

Claims history is recorded in the insurance database CLUE (Comprehensive Loss Underwriting Exchange). Insurance companies consult CLUE to assess your and your home’s risk. Since all insurers can see your history, too many claims could get you blacklisted. You want to take care of your claims history like you take care of your credit score — both are easily accessed by the companies that you rely on for your financial well-being.

How to file a homeowners insurance claim

  • Contact your insurance company to find out 1) if the issue is covered and 2) how long you have to file a claim.
  • Fill out any claims paperwork promptly—there are deadlines that are dictated by your policy to keep track of here too.
  • Document what has been lost or damaged and check the worth of these items online. If you have a home inventory, that will speed up the process.
  • If the situation has caused damage that requires temporary repairs—like boarding up a broken window—it’s important to get photo and/or video record of how the scene originally appeared.
  • Don’t throw anything away. Treat the damaged area as much like a crime scene as possible.
  • Save your receipts for expenses related to temporary fixes and living outside of your home. “Loss of use” coverage reimburses you for hotel stays if your home isn’t suitable for dwelling.
  • Prep for the visit of the insurance company adjuster (if it’s a large claim) by organizing your documentation and noting the damage you want to call their attention to.
  • Stay on top of the claims process so paperwork—and pay-out money—isn’t languishing on someone’s desk. For more complex claims, like a fire, the process of assessing the damages and sourcing technicians can take weeks to months. Don’t be afraid to get on the phone with your agent periodically until the claims process is finalized.
  • If the insurance company’s payout is significantly lower than you had hoped, consider hiring a public adjuster to assess the damage. You can appeal the insurance company’s decision by presenting an independent report.

Theft & vandalism claims

If a crime is at the root of your claim—theft, burglary, vandalism—contact the police first. Not only do you need to report the crime, but a police report (plus the names of the responding officers) will help you file your insurance claim.

When to file a home insurance claim

The typical homeowner files one claim every 10 years. That’s both the average and the unofficial limit: More than one claim in that timespan can get you into hot water with the insurance powers that be, in the form of an unrenewed policy and a metaphorical red X next to your name on the underwriter database. For most companies, two claims in three years is the breaking point. They see you as too risky to insure. (Curious about your status? You can order a copy of your CLUE report from LexisNexis.)

You’ve heard the phrase “Don’t sweat the small stuff.” When it comes to insurance, the adage should go, “Don’t claim the small stuff.” A single claim can cause your rates to raise by 9%; and a second by 20%. Only file a claim if you’re sure that the reward will outweigh the cost. If it’s not fairly catastrophic damage, it’s not worth making your once-a-decade claim. If your loss is less, equal, or only slightly higher than your deductible, it’s best to not file a claim at all.

You will need to think twice if you have homeowners insurance bundled with auto insurance. The plus side of bundling is getting a discount; the downside is getting doubly dinged for claims. Since claims for damage to either your home or your car will impact the same policy, those strikes add up twice as fast.

If you have already initiated the claims process but decide that it isn’t worth pursuing, you can cancel it, so long as no money has exchanged hands. The company will keep a record of your claim, but it will be classified as “zero payout” and won’t affect your premiums or your insurability.

What impacts premium increases

  • Cause of claim
  • Total cost of claim
  • Number of claims filed within the past ten years
  • State of residency

Homeowners insurance coverage

  • Dwelling insurance covers your home’s structure, including attached buildings (garage) and built-in appliances (water heater)
  • Personal property insurance covers belongings like clothing, furniture, and electronics
  • Liability insurance covers personal injuries incurred on your property, like falls or dog bites
  • Additional living expenses (ALE) insurance covers the costs of temporary housing if you’re forced to leave your home due to a covered claim

Note: You’ll need to file separate claims if the peril has affected more than one coverage type.

Typical covered perils

  • Theft & vandalism
  • Fire & smoke
  • Lightning
  • Hail & wind damage
  • Falling objects
  • Explosions
  • Riots
  • Water damage
  • Damage from electrical surges

Types of coverage limits

  • Actual Cash Value (ACV)
  • Replacement Cost Value (RCV)
  • Guaranteed Replacement Cost (GRC)
  • Extended Replacement Cost (ERC)

What about renters insurance?

Renters insurance doesn’t cover all the same things as homeowners insurance, but it hits three big ones: personal property, legal costs arising from lawsuits against you, and medical payments to anyone injured on your property who doesn’t live there.

If anything occurs on your rented property that has you thinking of making an insurance claim, you should contact your landlord first. The property management is on the hook for structural repairs in most jurisdictions. If they can resolve the problem without your needing to make a claim, all the better. Like home insurance claims, renters insurance claims are recorded in the CLUE database.

After consulting your landlord to find out what remaining losses will roll over to your renter’s insurance coverage, get on the phone with your agent. But remember that the rules still apply: Be sure that your claim is worth more than the expense of jacked up premium and a lingering claims history.

What’s Next?