When NOT To File A Homeowners Insurance Claim

Sometimes it’s better to pay for damages to your home than to file a claim and risk increased premiums—or a canceled policy. Find out when you should not file a claim.

You’re being tracked. Not in some creepy, stalker kind of way, but every time you file a claim against your homeowners insurance policy, you’re entered into a nationwide database called CLUE (Comprehensive Loss Underwriting Exchange).

File too many claims and your insurance company could cancel your policy—or at the very least, raise your rates. And, because CLUE is a nationwide database used by nearly all insurers, you may have trouble securing a policy with a new company.

If you need to make a claim and your policy covers the loss, then by all means make use of that policy you’ve been paying for. But there are some instances where you may be better off not filing a claim.

You’ve already filed a claim within the last three years.

Generally, if you file more than two claims in three years, your insurance company is going to get jittery. If you recently filed a claim, you may want to think twice before filing again.

The damage is less than three times your deductible.

Insurance is meant to help you pay for high-cost damages, not help you keep up with home maintenance—which is how many insurance companies will view multiple small claims. Sometimes it’s better to use your emergency funds to repair damages than to have your premiums increase to the point where you’re not only paying the amount you would have paid to repair the damages, but more.

The issue does not involve injury.

If someone was injured on your property—say they slipped on your steps or were bitten by your dog—then you should definitely file a claim.

The damage involves moisture.

Water and mold are your enemies. Not only can they cause serious damage to your home, but they can also wreak havoc on your homeowners insurance policy. If the issues are serious and could cause you significant financial hardship, then you should make a claim. Be aware, though, that you could find yourself with a cancelled policy and have difficulty securing another.

You haven’t maintained your home.

Your home is a major investment and needs to be maintained regularly. If the damage to your home is a result of neglect, your insurance claim likely will be denied anyway. So why go through the bother of filing and having your claim entered into CLUE for all eternity? If you can, repair the damages yourself—before they get any worse.

Insurance companies do cut you some slack when it comes to damage resulting from weather-related issues. In most instances, you can file a claim without worrying about your premiums increasing.