When should you file a home insurance claim, and when should you pay out of pocket?


No one likes paying for home insurance, but when something like roof damage or water damage happens at your house, you’ll be glad they have it.  Roof damage and water damage can be VERY costly and having home insurance to cover some or all the costs can be a real stress reliever.

But knowing when you should call your insurance carrier to file a claim and when should you pay for the repairs out of pocket can be tricky.  The most important thing for you to know is if you call your insurance carrier’s claims department for any reason, the carrier will mark your call as a claim, even if you only ask a question and don’t ask to file a claim.   Read that again: if you call your insurance company’s claim department for any reason, it’s most likely they will mark the call as a claim.  So, before you call your insurance carrier, there is one (maybe two) other calls you should make first.

The first call is to a reputable repair company in your area.   Have this company come out and provide an assessment of the damage and provide an estimate of the cost to repair or replace—this way you’ll know if the amount of the damage is above or below your deductible.  Example:  Let’s say you notice water coming out from underneath your clothes washer, so you call a plumber to come to take a look.  The plumber pulls your clothes washer away from the wall but can see water damage on the wall indicating a leak of some sort inside the wall.  He’s going to need to tear out that portion of the wall to fix whatever is leaking and gives you an estimate of $3,000 to tear out the wall, make the repair and replace the wall.  If you have a $5,000 deductible, there is no need to call the insurance company, you’ll need to pay for the repair.  (And if your deductible is $2,000, you can either choose to call your insurance provider and file the claim or pay out-of-your-pocket).

If you’re unsure about your insurance coverages and/or deductible, the second call you may want to make is to your insurance agent so that he or she can go over with you the details of your policy and your financial responsibilities so that you will what will be covered (what won’t be covered) and your financial responsibility before the insurance company will pay for your claim.

But most importantly, remember every time you call your insurance provider’s claim department, it will be considered a claim, so take the extra time to call a reputable repair person first, gather your facts, and then decide if it makes sense to call your insurance carrier.