Rain, Wind and Damage – Now What?

January 2024 was a stormy month with significant rain, wind, and storm damage. Many homeowners who have experienced damage may have begun to consider or are contemplating their options and whether they should make a claim to their homeowner’s insurance.

Owning a home brings a sense of security and comfort, but when storms strike, that security can be threatened. Homeowners insurance plays a crucial role in safeguarding your investment against unforeseen events, such as storm damage.  This article explores making a claim, the claims process, and some of the intricacies relating to the impact of such claims as they relate to the potential for increased premiums and the impact on a homeowner’s insurance rating.  

Making a Claim
When your home sustains damage due to storms, the first step is to file a homeowners insurance claim. Typically, this process begins by contacting your insurance broker/provider promptly. Most policies require homeowners to report damages within a reasonable timeframe, so it’s essential to act swiftly.
Documenting the damage is essential. Take clear photographs and gather any relevant documentation, such as repair estimates or receipts for temporary repairs. This evidence will be invaluable during the claims process, helping your insurer assess the extent and value of the damage and determine the appropriate coverage.

The Claims Process
Understanding the claims process is vital for a smooth experience. After filing a claim, your insurance company will assign an adjuster to assess the damage. The adjuster will review your documentation, inspect the property, and determine the coverage and compensation to which you are entitled based upon your policy and the insurance you have purchased. Timely communication and cooperation with your insurer can expedite the claims process.
Once the assessment is complete, you will receive a settlement offer. It is crucial to carefully review this offer and, if necessary, negotiate with the insurer to ensure fair compensation for the damage. Most homeowners are surprised to learn that although a claim has a certain value, the insurance company will offer much less for the claim because of depreciation and wear and tear. 

Risk of Premium Increases
While homeowners insurance provides a safety net during challenging times, property owners must be aware of potential consequences, particularly regarding premium increases. In some cases, filing a claim, even for minor storm damage, may result in higher future premiums. Insurance companies view policyholders who frequently make claims as higher risks, potentially leading to an adjustment in premiums.

Before filing a claim, it would be wise to weigh the cost of repairs against the potential premium increase. If the damage is minor and the repair costs are comparable to or only slightly exceed your deductible, you might consider covering the expenses out of pocket in order to avoid potential long-term increases in your insurance premiums.
 
 
Impact on Insurance Rating
Every claim you make can affect your insurance rating, which is a key factor in determining your premium costs. Insurance companies use various factors, including the frequency and severity of claims, to assess a homeowner’s risk profile. While a single storm damage claim may not have a significant impact, multiple claims within a short period can lead to higher premiums or, in extreme cases, non-renewal of your policy.

To maintain a favorable insurance rating, it is advisable to strategically manage your claims and prioritize filing only when necessary. Small, manageable repairs may be worth handling independently to avoid potential repercussions on your long-term insurance costs.

Homeowners insurance serves as an important financial safety net when storm damage threatens your home. However, understanding the claims process, weighing the risks of premium increases for small claims, and being mindful of the impact on your insurance rating are essential considerations. By making informed decisions and working closely with your insurance provider, you can navigate storm damage claims more effectively, ensuring the protection of your home without compromising your financial stability in the long run.

If you believe you are not being treated fairly by your insurance company relating to a recent homeowners insurance claim, please contact Stock and Leader.