The purpose of an insurance policy is to manage the risks of unexpected events and alleviate the financial costs associated with these risks. Generally, a homeowners insurance policy covers your home and its contents against damage, theft, and even personal liability if someone is injured while on your property. Filing a homeowners insurance claim can come with additional costs that may come as a surprise. If you have experienced a loss, consider the following advice to avoid making an expensive mistake.

Insurance Attorneys in Orlando

Know the cost of your insurance deductible. 

You should know what your deductible is on your insurance policy. This is the amount of money you must pay out-of-pocket before an insurance company will pay any expenses for the repair of your home or property.  A deductible can act as a deterrent to homeowners from filing a series of small claims. Generally, a higher deductible results in lower monthly premiums and vice-versa. If you’re going to file a homeowners insurance claim, make sure you have the money to cover your deductible first.

Pay for small damages on your own.

Before running to your insurance provider, make sure you get a quote for how much it will cost to repair the damage to your property. Depending on the amount of your insurance policy deductible, it may be more cost effective to pay out-of-pocket for repairs. If your deductible exceeds the cost of repairs, then the insurance company doesn’t need to be involved. In this case, you wouldn’t want to report a loss or make a claim. Simply pay for the damages on your own.

Anticipate increased insurance premiums.

Making an insurance claim, even if no payment is made to you by the insurance company, will result in a notation being made in your claims history file. Such a notation could lead to higher insurance premiums.  Insurance companies use your claims history to determine your premium rate. If you have too many claims on file, your insurance company might decide not to renew your policy and you may have a difficult time getting a new policy at an affordable price.

Even if the repair exceeds your deductible by $1,000 to $2,000, you may want to think twice about making a claim. CNBC reported that the average premium increase after making an insurance claim is 9%. The average increase rate in Florida is 2%. For this reason, you may not want to make a claim for minor damages or losses, even if your rates only go up by 2%.

Use your insurance for medium and large losses. 

Sometimes, catastrophic events can strike your home such as a fire, burglary, storm damage or burst water pipes. Ideally, these are the types of scenarios for which you would make an insurance claim. The losses incurred from these events will far exceed the cost of the deductible on your policy, as well as any insurance rate increases. 

Not all losses are created equally. 

Not all losses are treated equally in the eyes of your insurance provider, even if they are considered large losses. Before a payment is made by an insurance company, you will have to prove that the damage you are making a claim for was caused by an event covered by the policy. Sometimes, you may not be offered the full amount of your loss to properly settle a claim. Large losses can cause a lot of stress and could potentially ruin you financially if you don’t have the right people helping you. 

At the Law Offices of Michael B. Brehne, we can help you decide if you should file a homeowners insurance claim following a loss. To discuss what options are available to you, set up a free consultation by visiting the Law Offices of Michael B. Brehne.