Five common homeowner’s insurance claims
We buy homeowner’s insurance, hoping we don’t have to use it. Unfortunately, you will likely have to make a claim at some point. In fact, about 1 in 15 homeowners make a claim every year, according to the Insurance Information Institute. That adds up to millions to make repairs or replace belongings.
It’s important that you have the right coverage, so you are covered if your home is damaged by a storm, a fire, or flooding. To help you find the right coverage, we discuss the five most common claims.
1. Wind damage
Whenever big winds come howling, insurance claims are sure to rise. About 24% of claims were made because of wind damage, whether from a bad storm, tornado, or hurricane.
High winds can damage your roof, destroy outdoor structures, uproot trees, and send smaller objects hurtling through windows. Hurricanes and tornadoes have been known to tear roofs off, which can damage the inside of your home and destroy your belongings.
It should be noted that some states and regions in the country require you to buy separate policies to cover wind damage due to hurricanes and other tropical storms. Be sure to check the requirements in your state.
2. Water damage
Water can be quite destructive when there’s enough of it. For insurance purposes, water damage is divided into two categories.
Non-weather damage: This makes up about 20% of claims and occurs due to things like burst pipes, sewer backups, faulty drains or valves, faulty appliances, or other types of water leaks.
Weather-related damage: This accounts for another 11% of claims and can include roof damage related to a storm, frozen pipes, snow or ice buildup, and torn siding.
Flood damage from a weather-related event is generally not covered by homeowner’s insurance. You may have to buy a separate flood insurance policy.
3. Damage from hail
Maybe you don’t think of hail as destructive, but it certainly can be. In fact, damage due to hail makes up about 15% of all homeowner’s claims. Small bits of hail (0.2 inches) might not be a problem, but a severe storm can produce chunks as large as 8 inches in diameter. Even something that’s around 0.75 inches can make a mark.
Most claims related to hail are for damaged roofs and roof tiles. It can also break windows and damage the siding on your home.
4. Fire damage
Home fires are not the most frequent cause of claims, but they are among the most expensive. A typical claim due to a fire can cost anywhere from over $17,000 to $37,000 or more. Insurance will cover fires due to old wiring, faulty appliances, and kitchen fires, and wildfires.
Be sure to check your policy to see how much coverage you have, especially if you live in an area that is prone to wildfires. If you have to replace your whole house, it could cost hundreds of thousands of dollars.
5. Theft
Not all claims are related to damage or a weather-related event. There are about 2.5 million burglaries every year, and 66% of those are home break-ins.
Cash, TVs, computers, jewelry, stereo equipment and other electronics, clothes, and artwork are all popular items for thieves. Even your identity can be stolen if thieves get their hands on credit card/bank statements or your Social Security number. If someone does break into your home and takes your belongings, your insurance will pay to replace them.
It’s a good idea to invest in a home security system. This can act as a deterrent as would-be thieves are more likely to target another home. Some insurance carriers offer premium discounts if you have a security system as well.
Ensure you have enough coverage
To minimize your losses and make sure you have enough coverage, be sure to do an annual home inventory. This is a process in which you go through your home and determine the value of your belongings.
You want to make sure you have enough coverage to repair or replace everything if necessary. Do the inventory before anything happens. If you wait and experience major loss or damage, you are liable to forget something or devalue your belongings.
Ask us about your insurance needs
Is it time to review your insurance needs? If you bought a new home or made renovations, your needs may have changed. We will be happy to review your current policy and discuss any available discounts. You can also bundle policies, including auto and boat insurance for additional discounts.
If you have any questions about homeowner’s insurance or you would like a quote, contact us today.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.