How to File a Home Insurance Claim: Is It Worth It, or Will You Regret It Big-Time?

By Matt Christensen – REALTOR.COM

If your home gets damaged by a flood, falling tree, or other random accident, you'll want to know how to file a home insurance claim. Homeowners insurance can help you cover the costs of repairs, providing some much-needed financial relief. But before you file that claim, you'll want to know the process (and the consequences) so you can plan accordingly. Here's what you need to know about filing home insurance claims.

How much will I get paid?

While it depends on your particular policy, typically insurance companies will cover anything over your deductible, says Penny Gusner, a consumer analyst for Insure.com. For example, if your deductible is $2,000, and the damage is going to cost $50,000 to repair, you’ll pay the $2,000 and you’ll receive the remaining $48,000. Whatever your deductible, you won’t be able to file your claim until you've paid that first.

Are there consequences to filing a claim?

If you file a lot of claims, this might spur your home insurer to raise your rates or cancel your policy once it's up for renewal.

"You'll look like a risk," says Gusner. “Depending on how large the claim is and how many you’ve had, your insurer may ‘nonrenew’ you for the next period.”

However, assuming you’ve been careful about how often you file claims, your policy shouldn’t change drastically.

“It’s unlikely that your policy would be canceled,” says Gusner. When in doubt, ask your agent whether or not it’s worth doing in the long run, and how it could affect your policy.

Should I file a claim for minor repairs?

Even if your repairs surpass your deductible, that doesn't mean you should definitely file, because it could prompt your insurer to raise rates.

As a general rule of thumb, "if you can afford the cost of repairs, it's best to pay out of pocket," says Gusner. "I would advise paying out of pocket for anything up to $1,000 over your deductible."

Should I document the damage?

For starters, keep in mind that it’s good for everyone if you can stop moredamage from occurring, so handle emergencies yourself as soon as possible.

"If a window is broken, and rain is pouring in the house, cover it up," says Gusner. Before you clean up, however, you'll want to take some photos as proof of the damage. From there, you'll want to inform your insurer as soon as you can.

What is 'proof of loss' and how does it apply to filing a claim?

A proof of loss form is a sworn statement by you, the policyholder, to your insurance company regarding your loss and/or damages.

“Typically, it includes pertinent information like where and when the loss took place and the amount you are claiming,” Gusner explains. “You’re basically giving concise details about your claim and how the damage was done.”

A proof of loss form is important to getting your claim processed quickly and efficiently, and it usually accompanies other supporting documents such as receipts.

After I file a claim, how long does it take to get paid?

The laws vary by state regarding how quickly a payout must occur.

"Typically, the insurer must approve or deny a claim within 10 to 15 days," says Gusner. But some states allow up to 60 days—and others just stipulate “within a reasonable time.”

Once the claim is approved and an amount is agreed on, payment is usually due within 30 to 45 days. This means that, in theory, it should take about 60 days from the time you file your claim to receive your payout.

Is there anything I can do to speed things up?

The more organized you are—with documents, photos, and receipts at the ready—the easier you make the jobs of insurance agents, and the faster your claim will get processed.

“Have a list of everything you want to show the claims adjuster,” Gusner advises. “Get detailed estimates from contractors, especially if you’re making a claim after something disastrous, during a time when a lot of other people will likely to be filing claims.”

Filing in person can also help speed up the process.

“Having someone show up in person puts a face with the name, and tends to make an agent more willing to pursue and check on the claim,” Gusner adds.