Should You File a Homeowners Insurance Claim?

Homeowners’ insurance is designed to protect you from financial ruin when the worst happens to your largest asset. If a plane crashes into your house, it is obvious that your insurance company will need to become involved. However, for less serious losses, should you file a claim? Here, we answer some commonly asked questions on this topic:

Does my policy provide coverage for the damage that occurred?

Perils such as fire, smoke, and explosion are usually covered. Coverage for foundation, water damage or slow seepage will depend on the kind of policy you have. Flooding due to rising waters is never covered in a home insurance policy. If you attempt to file a claim for something that is not covered, you will not only be wasting your time, but you will also end up with a claim against your record. The golden rule is to ask your agent what your policy covers, before making that call to the claims department!

What is a deductible, and how much is mine?

The deductible is the portion of the loss that you pay out of pocket before the insurance steps in to take care of the rest. On your homeowners policy, your deductibles will usually be listed as percentages, or sometimes dollar amounts. Typical deductibles for homeowners insurance in Houston are 2% for wind and hail (including hurricane), and 1% for all other perils. In other words, on a $300,000 home policy, you would pay the first $6,000 of a weather-related claim, and the first $3,000 of all other claims. If you can’t find the numbers on your policy, or if you are unsure, give your agent a call and they will be happy to explain.

It looks like the damage will probably be more than my deductible. What next?

You should get an estimate from a licensed contractor for the total cost of the repairs. In fact, you’ll want to do this anyway, regardless of whether you plan on filing a claim.

So …. the repairs will cost $7,000, and my deductible is $6,000. I’m good to file a claim, right?

Not so fast. All claims, even those where little or no money was actually paid out, will show on your record. Claims often lead to premium increases – particularly if more than one claim is filed over a three or five-year period. If you have a lot of claims, you may even be “non-renewed” by your insurance company, and will have to seek inferior coverage elsewhere. In other words, it may be cheaper in the long run to pay for the damage yourself, even if the repair bill exceeds your deductible. So the best advice is speak to your agent, do the math, and don’t rush to file a claim when something happens.

My house burned to the ground, so should I file a claim?

Of course. Major disasters are what your home insurance is there for. This is the moment you’ll be glad you opted for the Replacement Cost policy, instead of an Actual Cash Value one which depreciates your roof and personal property every year.

My neighbor fell down in my driveway and broke her leg. Should I file a claim?

Yes. You never know when a liability claim can become a full-blown financial and legal disaster, so it is wise to file these kinds of claims as soon as possible.

My old fence finally fell down in last week’s storm. It was due for replacement anyway. Will my homeowners’ insurance cover it?

No. Your side of the bargain with the insurance company is to maintain your home to a reasonable standard, and your homeowners policy is not designed to cover routine maintenance or wear-and-tear issues. This means that any related claims will be denied.

Be Sure to Get Boat Insurance This Summer!

You wouldn’t even consider driving off down the road without auto insurance, so why take to the water without boat insurance? Although certain kinds of small boats may be covered under your homeowners’ insurance policy, for most watercraft with a motor you’re going to want a separate boat insurance policy. The good news is that boat coverage is usually surprisingly affordable.

Boat insurance coverages are broadly similar to car insurance, and can include collision damage protection, compensation for theft or damage to your boat, bodily injury and property damage liability, medical payments, additional equipment …. and even roadside assistance (probably best referred to as waterside assistance!).

As with auto insurance, it is important to include uninsured/underinsured boaters coverage. That way, if you get hit by an uninsured boater while out on the water, or if that boater doesn’t have enough insurance, your own boat policy would step in to cover the damages.

The cost of your boat insurance will vary depending on where you live, the type of boat you wish to insure (especially how fast/powerful it is), whether you use your boat on inland waters or the open sea, and which coverage options you select.

As always, your independent insurance agent is on hand to not only give you expert guidance about which coverages you need, but also to shop your requirements with a variety of different carriers to find the policy that works best for you.

Happy boating this summer season!

6 Reasons Why You Should Purchase Flood Insurance Right Now

As of July 2016, just 15% of homeowners in Houston carried flood insurance. This number has increased since Hurricane Harvey, but far too many homeowners in this bayou city are still without flood protection. Here is why you should purchase flood coverage:

Flood insurance is not included in your home insurance policy: Some people don’t even realize they are without coverage until the worst happens. Your home insurance carrier will deny all claims relating to rising waters entering the home.

Flood insurance is not expensive: With rates starting at just $349 a year for $100,000 in building coverage and $40,000 in contents coverage, flood insurance is the best value insurance that money can buy.

Disaster assistance is not enough to rebuild or elevate your home: Even a few inches of flood water can cause devastating and costly damage, and a handout from the government will likely cover just a small fraction of your expenses.

Flooding is unpredictable: Many homes that flooded during the Memorial Day floods in Houston in 2016 were unaffected by Harvey …. and vice versa. Urban development, weather patterns, and other factors mean that literally anywhere in Houston is at risk of flooding.

You’re grandfathered in: Flood maps in Houston are expected to change as more severe weather events become the norm. Buy a preferred zone flood policy now and keep it active, and you’ll keep the same low rate even if your neighborhood gets rezoned and premiums double.

Flood season is coming: June through October is when the most severe weather events occur in Houston. There is a 30-day waiting period after you purchase flood coverage before the policy takes effect, so get your protection in place before the rain arrives!