Top 5 Homeowners Insurance Claims
As a homeowner, you know there is always a chance of events beyond your control that can cause a loss to your home or property. You can hope for the best but prepare for the worst. The smartest way to prepare financially for potential home losses is by purchasing homeowners insurance coverage.
The basic coverage provided by homeowners insurance includes protection against covered perils such as wind, hail, fire, and theft, along with liability protection if someone is injured on your property. This is not a full list of coverage options—there are many optional homeowners insurance endorsements that can add coverage beyond the basic homeowners insurance policy.
Once you have secured insurance coverage for your home, you can have some peace of mind that you are prepared for most possible losses. Losses to home and property can come in all forms, shapes, and sizes, and occur because of natural disasters, theft, fire, or other reasons.
Patterns in homeowners insurance claims are influenced year to year by environmental factors such as the severity of weather events like hurricanes, winter storms, flooding, and other types of catastrophic weather occurrences. Of course, there are always those rare—although not unheard of—homeowners claims such as a sinkhole claim. According to data from the Insurance Information Institute, there are thousands of small sinkholes that appear and cause claims in the U.S. each year.
While you may not experience a sinkhole, there are other types of homeowner claims that you are much more likely to experience. Statistics show that approximately one in 15 homeowners will file some type of insurance claim each year.
If you live in Florida, your homeowners insurance policy must provide coverage for sinkhole losses, specifically a catastrophic ground cover collapse.
What Are the Top Home Insurance Claims?
Here are the most common types of homeowner losses ranked by claims frequency between 2014 and 2018, according to a report by the Insurance Information Institute.
1. Wind and Hail
Wind and hail damage includes damage caused by high-velocity winds, which can uproot trees, cause roof damage, and damage the infrastructure of a home. Strong storms can produce heavy winds and cause damage to your home’s siding and shingles or cause a tree to fall on the roof of your home.
Hail produced from strong storms can cause heavy damage to homes and property. Hail can measure anywhere from 0.2 inches to up to 8 inches in diameter. The type of hail that causes damage to homes is usually at least 0.75 inches in diameter. Large hailstones can wreak havoc on roofs and crack wood, concrete, clay, asphalt, and other types of roofs. Hail can cause windows to break and damage home siding.
2. Water Damage and Freezing
Another top cause of home damage is caused by water. Water damage is divided into two categories:
- Non-weather water damage
- Weather-related water damage
Non-weather water damage can include problems with sewer, plumbing pipes, drains and valves, appliances, and water leaks.
Weather-related water damage claims can include roof damage, frozen pipes, torn siding, and other home damage. Temporary living expenses are also covered if you have to find other living arrangements while your home is being repaired.
Flood damage is not covered by homeowners insurance. For flood coverage, you’ll need to purchase a flood insurance policy.
3. All Other Property Damage (Including Vandalism and Malicious Mischief)
Vandalism and malicious mischief losses include losses caused by an intentional injury or destruction of property such as someone breaking your window or spraying graffiti on a fence or a garage.
Most homeowners insurance policies have limits on the amount of coverage provided for vandalism and malicious mischief, so read your policy carefully or check with your insurance agent when in doubt of the amount of coverage you have.
4. Fire and Lightning
Residential fires are a top cause of homeowner losses. The National Fire Protection Association reports there are on average 355,400 residential fires per year. Common causes of home fires include cooking, electrical distribution and lighting equipment, heating, intentional fires, and smoking. These home fires result in an average of $6.9 billion in property damage along with countless injuries and deaths each year.
Lightning can cause a power surge in your home which can destroy appliances and costly electronics. The lightning can cause a power surge if it hits your home, power lines, or telephone wires. Not all policies cover power surges from lightning. You should read your homeowners policy carefully to see if it covers damage from lightning that strikes your home directly.
Finishing last (but not least) in the causes of home insurance claims is theft. Losses from theft include both personal property losses and property damage that occur during a break-in. Homeowners insurance covers theft of property both inside and outside your home and pays for repairs to your property that occurred during the theft. Homeowners policies vary in the type of theft coverage provided—actual cash value (ACV) or Replacement Cost Value (RCV).
Filing a Homeowners Insurance Claim
If you’ve suffered a covered loss to your home or property, it is important to know the proper steps to take when filing a homeowners insurance claim. Here are the most important ones.
- If you’ve been burglarized, suffered vandalism, have a home fire, or if there is someone injured at your home—the first step is to report the incident to authorities. File a police report and make sure you have a copy. You may have to provide a copy of the police report to the insurance company.
- After reporting the incident to authorities, contact your insurance company to get the process started. Your homeowners policy documents should list the number to call in case of a claim.
- Complete all claims forms required by your insurance company.
- Document the situation by photographing or videoing any damage if possible.
- Take any necessary steps to prevent further property damage.
- Save your receipts for any purchases made for temporary repairs.
- Make sure you are available to speak with claims representatives or claims adjusters when they call. By being available to provide necessary information, you will be helping to reduce the time it takes to settle your claim.
After you have filed a homeowners claim, an insurance adjuster will visit your home or property to inspect the damage and determine how much the insurance company will pay toward your claim. Ask any questions you have when the insurance adjuster visits or to the insurance company when initially reporting your claim.
The Florida Legislature. "The 2019 Florida Statutes 627.706 Sinkhole Insurance." Accessed August 6, 2020.
Insurance Information Institute. "Facts + Statistics: Homeowners and Renters Insurance." Accessed August 6, 2020.
Insurance Information Institute. "Homeowners Losses Ranked By Claims Frequency." Accessed August 6, 2020.
Fulton County Hazard Mitigation Plan. "4.3.6. Hailstorm." Accessed August 6, 2020.
National Real Estate Insurance Group. "Is It Covered? Theft and Vandalism." Accessed August 6, 2020.
National Fire Protection Association. "Home Structure Fires." Accessed August 6, 2020.
Allstate. "Does Homeowners Insurance Cover A Power Surge?" Accessed August 6, 2020.
Nationwide. "7 Homeowners or Renters Insurance Claim Filing Tips." Accessed August 6, 2020.