Homeowners insurance offers protection for homeowners in the case of unexpected events. These events can include natural disasters, fires, floods, or injuries that occur on someone’s property. It’s important to have homeowners insurance to protect you from the financial loss that can occur in these drastic situations.

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But did you know that there are also hidden costs that come along with having homeowners insurance?

Filing a claim can cost you big if you don’t understand how homeowners insurance works. Here are just a few reasons why filing a claim with your insurance company can cost more than it saves.

Homeowners insurance comes with a deductible

That’s the amount of money you have to pay before the insurance company will cover repair expenses. It’s important to understand this concept because insurance companies may offer you a lower monthly premium if you have a higher deductible. It’s up to you to decide which will save you money in the long run. You’ll need to make sure you can pay the deductible before trying to file a claim — otherwise you’re out of luck.

Claiming small damages won’t get you covered, but it will up your premiums

If the cost of repair is less than your deductible, then your insurance company won’t cover you. But if you make a claim, they still record it — and that means a higher premium for you. In fact, an analysis done by InsuranceQuotes.com in 2013 found that premiums, on average, increased by 9% after claims are filed. Florida is one of the states with the lowest increase comparatively, at 2%.You don’t want to make too many claims because your insurance company could drop you or raise your premium too high, and the recorded claims could keep other companies from offering you affordable insurance.

Again, don’t make a claim for damages if you can handle the damages yourself, or if the cost to repair is less than your deductible. We’d advise that you pay for repairs out-of-pocket even if the repair costs are over your deductible by $1,000-2,000.

Not all damages are covered

Insurance companies are very specific about the types of damages they cover through homeowners insurance. Make sure you understand the types of damages covered when choosing homeowners insurance and when filing a claim. You’ll most likely have to prove that the damage was caused by a covered event, and you might not even receive total coverage depending on the cause.

Insurance companies are very specific about the types of damages they cover through homeowners insurance. Make sure you understand the types of damages covered when choosing homeowners insurance and when filing a claim. You’ll most likely have to prove that the damage was caused by a covered event, and you might not even receive total coverage depending on the cause.

So, when should you file a claim?

You should file for medium to large losses. Because, unfortunately, natural disasters do strike. If your home is hit by a hurricane, catches fire, or floods because of broken water pipes, then it’s time to file a claim. The cost of repair for damages like these far outweighs your deductible and even the increased insurance premium.

But be careful and find guidance through the filing process. Otherwise filing a claim could make the situation even worse, and you could ruin your finances in the process.

To discuss if filing a homeowners insurance claim is beneficial to you, contact the Law Offices of Michael B. Brehne, P.A. and set up a free consultation.