Elements of 3 Common Homeowners Insurance Claims: Wind, Water, Fire
Fact-checked with HomeInsurance.com
In just the past few months there have been wildfires in Colorado and a windstorm that caused huge losses in the Mid-Atlantic. Many homeowners have had to file homeowners insurance claims just to start getting back on their feet.
Although there are many different types of damage as a result of these Acts of God, it’s a good bet that the most common types of homeowners insurance claims were made. On average, there about seventeen different coverages listed on a standard homeowners insurance policy. And though homeowners have to make claims at times when a natural disaster hasn’t struck, some claims can be prevented while others are seemingly luck of the draw.
Here are a few of the most common (and expensive) homeowners insurance claims:
Most Common Homeowners Insurance Claims
Wind and Hail
The residents of number of states are becoming very familiar right now with wind and hail claims.
The damage that can come from wind and hail is extensive. Unfortunately, wind and hail also cause some of the most expensive homeowners insurance claims—according to the Insurance Information Institute, the average wind and hail claim is about $6,881. While there are claims that can make this amount look like pennies, that’s still a nice chunk of change.
There’s not much you can do to avoid wind and hail—except take cover. Sometimes you may have notice and be able to prepare, but like those recently affected by a derecho, homeowners may not know what’s coming or be ready for its severity.
If you have ample notice, pull your vehicles into a garage to limit any damage from hail or wind tossing things at your vehicle. Anything exposed is up for grabs, but if there’s anything you can secure or store properly, you should do it—no matter how small the chance. Place easy to move items inside, and if something is too large or heavy to store, secure it outside.
One question often arising out of wind claims is about liability and your neighbors. What do you do if a neighbor’s tree falls on your home or vehicles? Should their insurance pay for it?
If your neighbor’s tree falls and pancakes your car or your roof, it’s YOUR insurance that will pay. Since it’s out of their hands and was Mother Nature’s doing, they can’t be held liable. Once that tree falls, it’s your responsibility to file a claim and clean it up. Legally, that’s the case too, and in some states, once the tree falls on your property, it becomes your property.
Lynne McChristian of the Insurance Information Institute confirms this, saying when it’s an act of nature, it doesn’t matter.
“What it really is all about is what coverage you bought and what damage you have to your own property. It doesn’t matter whose tree it is,” she says.
Another costly claim, water damage, can be incredibly varied, and there are tons of ways to end up with it. According to the III, the average water damage claim is $6,347, just a bit under wind and hail claims.
Water damage can result from leaking or burst pipes, overflowing sinks, toilets, or bathtubs, burst appliances like dishwashers or washing machines and leaking roofs.
Unfortunately, water damage is only covered if something in your home is responsible for the damage, as natural flooding isn’t covered at all, by ANY homeowners insurance. In order to be covered for natural flooding, a homeowner must buy a flood policy from the National Flood Insurance Program (NFIP).
Although your homeowners insurance will cover certain water damages, you must have the correct coverage or you may not be covered at all—regardless of why the damage occurred. The standard homeowners insurance policy may cover water damage from a burst pipe inside your home but may have exclusions and coverage limits, and some may not actually cover ‘water damage’ as a stated peril, and it usually has to be added as an endorsement or rider. At that point, you also have to figure out how much coverage you want and what deductible you want for it, since it usually requires its own deductible.
You’ll have to prove the damage was from whatever you’re blaming. If the damage occurred due to a leaky pipe, you’d need to demonstrate that. Your insurer wants to guarantee it was a complete ‘fluke’ and not as a result of negligence, since many water claims can be prevented with proper maintenance. The insurer will look for signs of negligence, like clogged drains or faulty pipes. If the insurer concludes negligence or normal wear and tear, the claim wouldn’t be covered.
At times, an insurer may pay for the damage resulting from a burst pipe even if it was old, but they may not replace or repair it. If they do pay for the damage and not the pipe, consider yourself lucky, because insurers never cover wear and tear or maintenance.
Allan Sabel, an insurance adjuster in Connecticut, advises policyholders to never use the word ‘flood’ either when making claims. To insurers, that word is very narrowly defined, and its use means one thing—natural flooding, Hurricane Katrina style.
Fire, Lightning, and Debris
Although fire is undoubtedly the most expensive claim, with the average claim at a whopping $27,691 according to the I.I.I., it’s fortunately not the most common.
This claim makes it extremely important to do two things with your homeowners insurance—one, make sure you have the correct replacement cost on your home so you know it’s insured for whatever it would cost to replace it. Remember–your replacement cost is not always the equivalent of what it’s worth—the tax appraisal and replacement cost could vary greatly, because replacement cost is the amount it would actually cost in the present to rebuild the home from the bottom up. This also makes it important to keep your policy updated about any additions or alterations you make to the home. NEVER make a guess about the worth of your home and keep it updated—failing to do so could result in a slower process in the event of a claim or could cause a lower payout.
Secondly, ensure your contents coverage is accurate. If you bought your homeowners insurance when you were young and were buying your first home, you may have only insured your contents for $20K. If you’ve accumulated personal property of value, like antiques or artwork on top of increased personal property, you need to update content coverage. Take inventory to find an accurate amount that would replace everything you own.
If you’ve ever been in a car accident, you know how devastating that feeling is, and cars are constantly depreciating. Imagine your biggest investment–your home–here today and gone tomorrow, or if you’re lucky, here today and only damaged tomorrow. Doing all you can to avoid claims and knowing how to handle them is vital, and although most people don’t exactly enjoy dealing with insurance, you’ll be happy you had the right coverage when you’ve lost almost all you own.