What Happens When You File a Homeowners Insurance Claim?

When to File a Home Insurance Claim

You should file a home insurance claim if you know the loss will be covered, repairs will cost more than your deductible and you haven't filed any other claims in recent years.

You can check the details of your homeowners insurance policy or contact your insurance company to see whether the loss will be covered. Standard homeowners insurance generally covers your home and possessions against damage from fire, smoke, wind, hail, lightning and certain types of water damage, up to the limits of the policy.

Home insurance typically also covers legal and medical costs if a visitor is injured on your property and pays additional living expenses (ALE) if you need to move out while covered home repairs are made. Homeowners insurance doesn't cover damage from floods or earthquakes, but if you have specialized insurance for those risks, you can file a flood or earthquake insurance claim.

It's generally best not to file a home insurance claim unless the cost of repairs is significantly higher than your deductible. Your home insurance deductible is the amount you're responsible for when you file a claim; it's subtracted from your claim payout.

Example: If you have a $1,000 deductible, a claim for $15,000 in repairs would pay out $14,000. A claim for $1,500 in repairs, however, would only pay out $500, so it may be better to pay out of pocket, perhaps by tapping your emergency fund.

Filing a claim can cause your premiums to rise, especially if you file multiple claims within a few years. Filing too many claims could even cause your insurer to cancel your policy. When deciding whether to file a claim, keep in mind that homeowners insurance is intended to cover major losses, not relatively minor repairs.

How to File a Home Insurance Claim

To file a homeowners insurance claim, follow these steps:

1. If a crime occurred, contact the police. If your house was burglarized or vandalized, for example, the police will visit and make a report, which is used to document your claim.
2. Contact your insurance company. You can usually start the claims process using your insurance company's app, online or by phone. Your claim will be given a claim number and assigned to a claims adjuster, who will handle your claim and explain your next steps.
3. Document the damage. Take photos and videos of any damage to your home or belongings, and use a home inventory list to record items that were stolen, damaged or destroyed and their value. Don't throw away damaged items until the claims adjuster says you can do so.
4. Make essential repairs. You can take reasonable steps to prevent further damage to your home, such as making emergency repairs to keep out weather and intruders. Take photos of the damage before fixing it and keep receipts for any repair expenses.
5. Get home repair estimates. Contact licensed contractors for quotes. Your claims adjuster can use this information to help calculate the cost of repairs.
6. Keep detailed records. While your claim is being processed, take notes of who you talk to, what they said and any other information you may need later on. Keep copies of all documents you give the insurance company.

Learn more: How to Make a Home Inventory List for Your Insurance

What Happens After You Submit a Homeowners Insurance Claim?

After you file a homeowners insurance claim, here's what you can expect your claims adjuster to do.

• Inspect the damage. Typically, this involves visiting your home in person, although some inspectors may use remote technology to conduct a virtual inspection.
• Gather documentation. The claims adjuster may ask for your photos, videos or home inventory lists, as well as any repair estimates you've collected from contractors. They'll also usually take their own photos, videos and notes, and may get additional estimates from contractors.
• Make a determination about your claim. Based on the evidence they've gathered, the claims adjuster will recommend either denying or paying your claim and will calculate the amount of any claim payout.
• Explain how the claim payout works. If your claim is approved, the adjuster will explain what type of payment you can expect, such as whether you'll receive actual cash value or replacement cash value for personal belongings.

If you believe your insurance claim has been unfairly denied, contact the insurance company. Sometimes they just need more information to resolve the claim. If you're still not satisfied, you can file an appeal with the insurance company or contact your state's department of insurance.

Learn more: What to Do if Your Homeowners Insurance Claim Is Denied

What Happens if You Need to Move Out While Your House Is Being Repaired?

If the claims adjuster decides your home is unlivable and you need to move out temporarily, your home insurance generally pays any additional expenses involved with living elsewhere. These could include the cost of rent, boarding pets, buying restaurant or takeout meals, transportation or having utilities installed. Check with your insurance company to see what expenses are covered and whether there are any dollar limits or time limits on your coverage.

Keep in mind that your homeowners insurance only pays additional costs of living. For example, if you usually spend $800 a month on groceries but you spend $1,200 a month on restaurant meals during your temporary relocation, your insurance will pay the $400 difference, not the whole $1,200.

ALE expenses must also be reasonable in comparison to your current standard of living. In other words, if you live in a modest home, home insurance won't pay for a luxury penthouse suite. Conversely, if you have a five-bedroom home, you don't need to squeeze your family of six into a studio apartment. Repairing or rebuilding your home can take months or even years; choose your temporary living quarters accordingly.

Learn more: What Does Homeowners Insurance Pay for During Home Repairs?

What Happens After Your Homeowners Insurance Claim Is Settled?

After your homeowners insurance claim is settled, you'll receive payment for the settlement amount (minus your deductible). When and how you get your payment, and how many checks you receive, may vary.

You'll generally get separate checks for each type of coverage (dwelling, possessions and additional living expenses). Here's how this typically works:

• Dwelling coverage: If your home is mortgaged, the check may be made out to both you and your lender or may go straight to your lender. If your lender gets the check, contact them to see how payment for repairs will be handled. Lenders may deposit the settlement in an escrow account and use it to pay for repairs. Your lender might also want to approve contractors or inspect repairs before issuing a payment.
• Personal property coverage: Depending on your policy, home insurance will cover replacement cost (the cost of replacing your belongings with comparable new items) or actual cash value (what the items are currently worth). Either way, you'll initially get a check for your possessions' actual cash value. Once you buy replacement items and submit the receipts to the insurance company, you'll typically be reimbursed for the difference in cost. Ask the insurer if you need to replace the items within a certain time frame.
• Additional living expenses: You generally won't receive an upfront ALE payment from your insurance company. Instead, you'll pay your living expenses upfront and submit receipts to your insurance company to be reimbursed.

Tip: Contractors may ask you to sign a document allowing the insurer to pay them directly. Read it carefully to ensure you're not surrendering your entire claim to the contractor. Ask your insurance company if you have questions.

Learn more: Replacement Cost vs. Actual Cash Value

Does Home Insurance Go up After a Claim?

Your home insurance may go up after a claim, depending on your insurance company, the type of claim and your claims history, among other factors. (If nothing else, you'll lose any discounts for being claim-free.)

When setting rates, insurers typically review a home's Comprehensive Loss Underwriting Exchange (C.L.U.E.) report going back seven years. If any claims were filed during that time, even by a previous homeowner, filing another claim could bump up your premiums. File too many claims, and your insurer might decide your home is too risky to insure.

The type of claim you file also affects how much your home insurance premiums may rise. In general, weather-related claims have the least impact, causing premiums to rise an average of 17%, according to data from Insure.com. Fire claims have the biggest impact, sparking an average rate increase of 29%.

Learn more: Why Are My Home Insurance Quotes So High?

How to Save on Homeowners Insurance

Even after you've filed a claim, there are still ways to lower your home insurance costs.

• Increase your deductible. A higher deductible usually translates to lower premiums. Check with your insurance carrier to see how different deductibles would affect your rates.
• Reduce your risk. Taking steps to make your home safer may earn you discounts on homeowners insurance. For instance, you might qualify for lower rates if you install a burglar alarm, fire alarm, pool safety gate or deadbolt locks.
• Modernize your home. If your home is older, the electrical system, plumbing or roof could be prone to problems that could lead to insurance claims. Upgrading to modern systems that meet current building codes might save you money on premiums.
• Bundle insurance. Buying multiple policies from the same insurance company—for instance, home and auto insurance—is known as bundling and typically garners you discounted rates.
• Investigate discounts. Home insurance discounts may be available through your job or membership organizations; you might also get discounts for buying a policy online, setting up autopayments or opting for paperless billing. Check to see what price breaks different carriers offer.
• Shop around. You can get home insurance quotes by calling insurance companies, visiting their websites or using online insurance marketplaces to gather quotes from multiple carriers. Once you've got several quotes, compare your options to find the best prices.

Learn more: How to Switch Home Insurance

The Bottom Line

Don't let worries about rate increases keep you from filing a home insurance claim when you really need to. There are ways to help keep your home insurance premiums down, including maintaining good credit. In most states, insurance companies can review your credit-based insurance scores when setting your rates. A higher score could translate to lower premiums.

Credit-based insurance scores differ from your regular credit scores, but are based on much of the same data, so improving your regular credit score could boost your credit-based insurance score too. As you work to improve your credit score, consider signing up for free credit monitoring from Experian. You'll be able to track the progress of your FICO^® Score^Θ and get alerts of important changes to your Experian credit report so you always know where you stand.