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3 Common Mistakes That Homeowners Make When Filing Insurance Claims

2010-03-19

Successfully filing a home insurance claim can be a huge task. The process is often complicated, and there a many steps that must be taken in order for the claim to be paid. Errors on the claim can cost both time and money, but most of these can easily be avoided. Here are 3 common mistakes that can be prevented before filing.

The first common mistake that homeowners make when filing insurance claims is actually filing the claim and not understanding the true purpose of home insurance. While a policy may cover relatively minor expenses, it is really intended to give financial protection in the event of major disasters. So while a claim may be valid, it may not always be wise to file it. Insurers are becoming more and more selective, so it is in the best interest of homeowners to keep claims at a minimum. For example, some companies will refuse to cover homeowners with any claims in their history at all, and still others will raise premiums or fail to renew policies once a file is claimed. Also, it does not make financial sense to file a claim if the policy's deductible is more than the cost of simply making the repair. Finally, the CLUE (Comprehensive Loss Underwriting Exchange) database, which most home insurers subscribe to, is a record of all claims made against a residence. This information is used to set premiums, much like car insurance companies use driving records. So once again, keeping claims to a minimum is the best option.

The second mistake that many people make is not contacting the insurance agent right away when something happens and filing a claim is indeed necessary. It is imperative to do this immediately and not waste any time. For one thing, the insurance company may very well want to view and assess the damage for themselves, and it's best if they can do this as soon as possible. Secondly, the agent is in a position to be able to assist in filing and expediting the claim, so take advantage of that fact. And don't overlook the golden rule in filing homeowner's insurance claims - document, document, document! Not following this rule is the third mistake often made. A successful home insurance claims depends on good documentation. The more evidence there is to support a claim, the more likely that losses will be reimbursed. Pictures, notes and videos all come in handy when it's time to provide a record of losses for a claim.

Home insurance coverage is a necessity for any homeowner. In the event that it's necessary to make a claim, avoiding common mistakes can help the process go as smoothly as possible.