When Should I File a Home-Owners Insurance Claim?

We discussed in an earlier post ‘What is a CLUE Report’, how  a  Comprehensive Loss Underwriting Exchange, or CLUE Report, will track up to a seven year claims history for a property and property owner.  As you can imagine, a CLUE Report with multiple claims may cause issues if you are trying to buy, sell, or insure a property.  Most people are unaware of CLUE Reports and how they affect property ownership and protection.  CLUE Reports include not only accepted claims, but denied claims and inquiries.  They are meant to be a comprehensive record of all loss history on you as an individual and on a property.

Regardless of payment to a claimant; whether or not you file or don’t ultimately file the claim; or whether it is denied or accepted; a call to your insurance company will most likely end up on your report.

If you’ve experienced a property loss (flood, fire, etc.) it doesn’t necessarily mean you should file an insurance claim.  Here are a couple of things to think about before you file an insurance claim:

• Is this a covered loss?  It’s safe to say that most of us have never actually read our homeowners insurance policy.  Even if you have, you probably don’t have your adjuster’s license.  If I’m right on both points it’s a good idea to have a restoration contractor that has a licensed adjuster on staff come take a look at your loss before filing a claim.  Most if not all restoration contractors will do this at no charge in hopes of gaining your business.  While they cannot guarantee you that your claim will be accepted it’s always a good idea to get the opinion of a trained professional before filing a claim.  Remember, even if your claim is denied it will show up on your CLUE Report and you will face questions about your loss if you sell your home.
•  How much will it cost?  I know many insurance agents who are encouraging their clients to view their homeowners insurance as a disaster policy.  Basically they are encouraging policyholders to carry a high deductible and do everything possible to avoid filing a claim.  There are several reasons for this, but the main reason is your carrier may drop you, non-renew you, or your rates could go up substantially at renewal simply because a claim was filed.  Again, it’s a good idea to have a restoration contractor come out and review the loss before filing a claim.  If you have a $5,000 deductible and it will cost you $5,500 to mitigate and repair the damages it is not in your best interest to file a claim.  You will end up a fraction of the total cost covered, the loss will go on your CLUE Report, and there is a chance your rates will go up.

The purpose of this article is not to discourage you from filling an insurance claim or contacting your insurance agent if you experience a loss.  The purpose is to educate you on the repercussions of filing a claim so you are aware of the consequences.  I want you to be informed so if and when you have a loss  you can make the best decision for you and avoid making a bad situation worse.

RELATED: Restoration Company Vs. Contractor/Repairman

Robert Collins is the Director of Client Services for Restoration Experts of North Carolina.  If you have questions or comments about this article you can contact him at (919) 557-7900 or [email protected]