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Filing a homeowners insurance claim can come with many worries about damage and costs. The average payout for a homeowners insurance claim was $13,955 in 2020, according to the Insurance Information Institute (III). But payouts for specific types of claims vary widely.
Understanding the typical causes of homeowners insurance claims, how to file a claim and how to reduce the costs associated with a homeowners policy can help prepare homeowners if an accident or damage occurs.
Average Payout on Homeowners Insurance Claims
Though the average insurance payout across all homeowners claims was $13,955 in 2020, different subsets of claims can average much higher. For example, fire and lightning claims average $77,340.
| Average Homeowners Claim Payout by Category | |
|---|---|
| Cause of Loss | Average Payout Amount |
| Fire and lightning | $77,340 |
| Bodily injury and property damage | $30,324 |
| Wind and hail | $11,695 |
| Water damage and freezing | $11,650 |
| Medical payment and other | $7,147 |
| Other | $6,773 |
| Theft | $4,415 |
| Credit card and other | $820 |
Source: Insurance Information Institute
Individual claim playouts may vary widely depending on the precise damage done. But knowing the averages can help homeowners estimate whether their coverage is adequate.
If your home does incur damage, it's important to understand how to file a homeowners insurance claim.
6 Steps to File a Homeowners Claim
Knowing that your home insurance will likely cover expensive damage is reassuring. But it's important to get familiar with your insurer's claim process before you need it.
If you need to file a homeowner's insurance claim, take the following steps:
- Contact the police to report any crimes. These could be things like theft or intentional property damage.
- Contact your insurance company and begin the online claims process. A claims adjuster will handle your claim and be your point of contact.
- Document any damage by taking photos and videos. Keep damaged items until you're permitted to discard them by your adjuster.
- Repair only what is necessary before your claim is approved. If you must make repairs to prevent further damage—such as putting plastic over broken windows or mopping up water―make sure to document the damage as it was before the repair.
- Get written estimates from a contractor. A local contractor can give you an approximate cost of repairs to share with your insurer.
- Keep notes. Record all interactions with your insurer and individual representatives in case you need to refer to them later.
It's also important to only file a claim when necessary. That's because each time you file a claim, you risk an increase in your rates. Though you may receive coverage in the short term, the increased rates could eventually outpace the sum received for the claim. Filing only when needed can help prevent your rates from rising.
How to Reduce Your Homeowners Insurance Rates
Judiciously filing claims is not the only way to keep low rates when paying for homeowners insurance. You can reduce your homeowners rates by:
- Raising your deductible: By increasing your deductible—the amount you pay out of pocket when filing a claim—you may be able to reduce your monthly premiums. This would mean you'd pay more when filing a claim, though, so it's important to balance this with your budget.
- Addressing risks: Reducing risk to your home ahead of time can save you big. Some changes to make to address risks include:
- Adding alarm systems and deadbolts
- Removing or gating trampolines, swimming pools and treehouses
- Installing storm shutters in hurricane-prone areas
- Bundling policies: You may be able to lower your homeowners insurance rate by bundling it with another type of insurance, like auto. Check your insurer's bundling options to see what you can save.
- Applying discounts: Some insurers may offer discounts for certain groups. You may qualify through your job or alma mater. Your insurer may also offer loyalty discounts for long-term customers.
- Modifying coverage: You can adjust coverage limits within different sections of your homeowners insurance such as liability, personal property and loss of use to adjust the overall price.
- Comparing prices: Shopping around can help you find the best homeowners insurance coverage for the most reasonable price. You can compare prices by requesting quotes from insurers; insurance brokers or agents can do the leg work of getting quotes for you.
- Improving credit: In many states, insurance companies can check your credit when you try to purchase a homeowners policy. They may use a credit-based insurance score to help decide your policy cost, so better credit could equal lower costs.
Get the Right Insurance Before You Have to File a Claim
Feeling confident about the amount and quality of homeowners insurance you have is a good way to prepare for possible future claims. When you know the average payouts for homeowners insurance claims, you can estimate your coverage needs better and save for anything that may not be covered.
If you're concerned about your homeowners insurance coverage, you can get apples-to-apples coverage comparisons from top insurance companies when you have Gabi®―a part of Experian―do the comparison shopping for you.