It’s one thing to have home insurance and another to know how to use it effectively. Many people face problems within their homes only to file claims and have the insurer reject them. These home insurance claim mistakes lead to problems between customers and insurers and ultimately cost these customers more.
In this post, you’ll come to terms with some of the most common home insurance claims mistakes. With a good breakdown of how people make these mistakes, you should also be able to avoid them. You don’t want to miss this information; so ensure you stick with me to the end of this post.
Home Insurance Claims Mistakes
Here are the most common home insurance claims mistakes and an explanation of them.
Having the wrong coverage
If you don’t have the right insurance, you might face major financial trouble. It may be as simple as having a thoughtful conversation with an insurance agent to avoid these pitfalls.
You may expect compensation for the cost of replacing your things, for example. At the end of it all, you’ll be disappointed to learn that your insurance only covers the monetary value.
Some homeowners mistakenly assume that their home insurance policies cover damage a storm, wind, or flooding causes. That assumption, though, might prove to be a costly mistake. In hurricane-prone locations, insurers frequently exclude wind and flood damage from ordinary home insurance policies.
Failure to read and understand your policy
If you didn’t read your homeowner’s insurance policy, that’s reasonable. Insurance policies, after all, are notoriously difficult to grasp.
This does not, however, free you of duty. Know what your policy’s coverages indicate, at the very least. For example, some consumers assume “water backup” coverage is the same as flood insurance when this isn’t true.
The term “water backup” is specific in that it only refers to the harm a clogged sewage drain causes. Misunderstanding (or failing to read) your policy can result in disappointment and, almost always, a negative claim experience.
Delay in filing claims
Make a claim as soon as possible. It may wind up inflicting more damage to your home if you hesitate.
The harm does not get better with time. Reporting a claim as soon as possible helps speed up the repair process. It will also reduce the time the insured has to deal with it.
Homeowners may bring a claim for up to a year (depending on the state). Waiting, on the other hand, has no benefits. If a storm or a wildfire has destroyed your home, don’t wait to get help.
Lack of a home inventory
Failure to preserve a house inventory is another claim error that starts long before any damage happens. If you have suffered considerable damage, this comprehensive inventory of your things will be highly beneficial. You’re more likely to forget about some items and leave them out of your claim if you work from memory.
Rushing into cleaning and fixing
You may be in a rush to clean up after an accident. Cleaning up too hastily, on the other hand, might be an expensive mistake.
Some homeowners throw away belongings that have been damaged before documenting the entire damage from a fire or flood. They also discard receipts that are needed to support a claim.
If you’re filing a claim for a damaged item, keep it until you have enough proof. When submitting a claim, keeping a clear document trail is essential. Failure to do so might result in a high-priced homeowner’s insurance claim.
Single-handedly handling big claim problems
Large, expensive claims can be complicated to conclude and might take months. Meanwhile, you could be dealing with a slew of insurance adjusters and mountains of paperwork.
If your property has sustained significant damage, you should contact a public claims adjuster as soon as possible. This person represents you while interacting with adjusters from the insurance company. They also ensure you have all the appropriate paperwork and meet deadlines.
A public insurance adjuster’s cost is typically between 10% and 20% of the insurance payment. It might be worth it because they’ll help you get what you’re entitled to while lowering your stress levels.
Negligence of your property
Home insurance is for unexpected damage, not problems you could avoid with regular upkeep. Failure to maintain your home may result in problems that your homeowner’s insurance will not cover. For example, it won’t cover damage from a burst water line.
An insurance claim for a roof leak you didn’t fix might receive a denial if you didn’t take preventive precautions. Failure to detect and report a potential claim, such as a gradual leak, might result in claim denial.
Improper or no documentation of events
Failure to document injury is the most prevalent claim blunder. It isn’t about taking pictures; it is about recording the damage as soon as you discover it.
Photos are your greatest friend when it comes to filing a claim. To show the degree of the damage, you should have “before” and “after” photographs of your home. This might make the payment process a lot easier.
Bringing so many claims on board
Insurers will look at your claims history when calculating your premiums. Insurers may look up home and vehicle insurance claims from seven years in the Comprehensive Loss Underwriting Exchange (CLUE) database. If you have many house insurance claims on your CLUE record, your home insurance premiums will surely go up.
This is the case because insurers associate claims with a higher likelihood of filing further claims in the future. Customers that represent a higher risk are subjected to higher rates. It may be better to pay for minor repairs yourself rather than filing an insurance claim if you can.
Ineffective Communication
The majority of home insurance claim errors are a result of a communication breakdown. When submitting a claim, it’s common for homeowners to be vague when describing the damage to their house.
Unclear homeowner claims sometimes result in delays, which may bog down the entire claims process. When filing a claim, homeowners should be as specific as possible about the harm.
