When you own a house, things break. It’s a fact of life. It’s also why you have homeowners insurance.
Homeowners insurance pays for damages when things in your house go wrong.
Sometimes, though, you’re better off paying for repairs on your own, without the help of your insurer. This is because insurance companies sometimes raise the cost of an insurance policy when the customer ends up making a claim.
Here are three times it might make sense to skip the insurance claim and pay for repairs yourself.
1. When Repairs Will Cost Less Than $1,000
Some house repairs are universally expensive — roofs and flooring, for example. Others are not so expensive.
When damage to your home costs less than $1,000 to repair, it can be better to pay out-of-pocket — especially because most homeowners carry a deductible of at least half that amount.
Yes, it can be painful to spend your emergency funds on home repairs, but the money spent today will usually be less than the cost of paying a higher insurance premium in the future.
2. When Damage Is Because Of Negligence
In every homeowners policy, there’s a clause about neglect. Paraphrased, it says: “If you don’t do the basics for your house, we’ll almost never pay out when things break.”
As a homeowner, then, it’s a waste to file a claim on your broken water heater if you’ve never had it serviced. Or, if you let a small hole in your roof become a large one, which caused additional damage to your home.
Routine maintenance costs money, but it’s always less expensive than paying for major damage out-of-pocket,
3. When Damage Is Specifically Excluded By Your Policy
Homeowners insurance is limited to certain types of home damage, and you can’t make a claim on the damage that your policy specifically excludes.
Flood water damage is the most common example of this.
Most homeowners insurance policies don’t pay for damages caused by flooding or sewage backup from rainfall. That’s what flood insurance is for.
Similarly, most policies don’t pay for wind damage from tornadoes and heavy storms because that’s the realm of wind damage insurance.
It’s bad practice to file a claim for uncovered damage. Your claim can raise your rates despite (or because of) your lack of insurance.
Review your policy before making a claim, or talk to your insurance agent for help.
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