When Does It Make Sense to File a Home Insurance Claim?

When Does It Make Sense to File a Home Insurance Claim?

Deciding whether or not to make a home insurance claim can feel like a nerve-wracking decision. What if your insurer rejects the claim? What if it increases your premiums? What if the costs of repairing the damage turn out to be much higher than you expected?


While every situation is unique, it is usually a smart financial decision to file an insurance claim in the following situations.

#1 The Cost To Repair Is Higher Than Your Deductible

The deductible is the amount you have to pay out of your own pocket to fix damages before the insurance company provides compensation. It may not make sense to file a claim at all if the expected damage is less than the deductible.


For example, if your deductible is $1,000, and a wind storm causes some minor damage that can be fixed for $500, you may just want to pay to replace it yourself.


However, if the damage is significant, such as from a house fire, it not only makes sense to file a claim but also to look into insurance lawyers or public insurance adjusters to help you with your claim. This is especially true of cases where there has been a total loss.


Deductibles exist largely to protect insurance companies from paying for small claims. Your insurance policy is intended for more significant losses.

#2 You Have Kept Your Home In A State Of Good Repair

One of the more common reasons for an insurer to reject a claim is wear and tear on your home. Insurance policies typically state that policyholders need to keep their homes in a state of good repair. That means dealing with repairs as they come up, replacing your roof on time, and fixing damage in the wake of a storm.


If you have not kept your home in a state of good repair, there is a chance the insurer may reject your claim. If you disagree with the insurer’s decision, you may be able to persuade them to reconsider with the help of an insurance lawyer.

#3 There is a chance there may be future damage

The full extent of the damage to your home may not be clear when you first discover it, but it’s up to you to report it to the insurer almost immediately. Waiting to inform the insurer can lead to the denial of your claim, which can put the homeowner in a difficult position.


Luckily, home insurance premiums usually do not go up in the wake of a claim. It is a common assumption, but in practice, you are not likely to be penalized for making a claim that winds up costing less than your deductible.

#4 You Have Coverage For The Damage

Not all sources of damage are covered in your insurance policy. You should make sure that you have an endorsement for the damage your home has sustained. Some losses, such as damage caused by flooding, may not be covered in a standard policy. In other cases, there may be low coverage limits on certain valuables, such as jewellery. Policy add-ons are available to increase those limits, but they cost higher premiums.


It does not always make sense to file an insurance claim, but in the above scenarios, your policy can provide critical financial aid.