How to file a home insurance claim

Filing a homeowners insurance claim can be stressful. First of all, there's the reason you're filing: maybe your home is damaged, something's been stolen or someone was hurt. Now you have to answer a lot of questions and provide evidence of the loss, and you may have heard a lot of stories from others about the difficulties of dealing with an insurance company on a claim.

Filing a homeowners insurance claim isn't complicated, but it's not something you do often (hopefully) so you're likely not familiar with the process and you have questions.

How do home insurance claims work? How are homeowners insurance claims paid? And how long do homeowners insurance claims stay on your record? Below, we'll break down everything you need to know about a homeowners insurance claim.

The homeowners insurance claims process

The steps to filing a home insurance claim, and the process that follows, can be broken down like this:

1. Call the police. This is always step one if a crime has been committed. Your insurance company will require a police report if you are filing a claim for burglary or other theft or for vandalism. If someone has been seriously injured in the incident, your call should be to 911.
2. Contact your insurance company. Call your insurer as soon as possible after the incident occurs to file your claim. The claims department will assign a claims number and an insurance adjuster to your case. "Be prepared to give the adjuster a description of the damage to your property, details about the loss and documentation related to your claim," says Loretta Worters, vice president of media relations for the New York City-based Insurance Information Institute.
3. Document the damage. Photograph and and take video of any damage and take detailed notes so you can provide documented proof to your insurance company. If there has been a theft, make a list of everything that is missing.
4. Cooperate with your insurer during investigation of the claim. Follow any directions the adjuster gives you. You may be required to allow an inspection, produce documentation, provide a recorded statement or submit to an examination under oath.
5. Make repairs in the meantime. If you have a leaky roof or water damage that may make your home unlivable, make temporary repairs to prevent further damage. "It's the homeowner's obligation to prevent damage from getting worse. For example, you may need to hire a water remediation company if you suffer emergency water damage, or you may have to install a tarp on your roof to prevent interior damage stemming from a roofing problem," says Josue Espinosa, a property insurance attorney in Orlando.
6. Keep all the receipts for repairs. Make sure you have all of your reciepts, and make copies because you will have to submit the originals for reimbursement, And if you must temporarily move out of your home because it's uninhabitable, keep a record of all your lodging and food expenses. You could submit them to your insurance company for reimbursement.
7. Consider hiring a public adjuster. Your insurance company's adjuster works for the insurance company, while a public adjuster has no relationship with your insurance company and works for you. Like a company adjuster, a public adjuster will evaluate your property (either in-person or via phone) will assess any pre-existing damage and ask questions about routine maintenance you've performed or other safety measures you've implemented to reduce the risk of injury, theft or damage on your property. If you do not agree with the insurance company adjuster's final determination or the settlement is significantly lower than expected, you may need to hire a public adjuster for help.

How are homeowners insurance claims paid?

Insurance claims are paid after an investigation, and may be paid by check or electronic funds transfer. Homeowners claims for damage are usually paid in two parts. An initial payment for the depreciated cost of the repairs, and then a second payment for the remainder once the repairs are done and the final cost is known.

"In most instances, an insurance adjuster will inspect the damages and offer you a certain sum of money for repairs, based on the terms and limits of your homeowners insurance policy," Worters says. "The first check you get is often in advance against the total settlement amount, not the final payment."

If you accept a lump-sum settlement upfront and you later discover further damage, you can reopen your claim and file for an additional amount.

"Most policies require claims to be filed within one year from the date of the disaster," Worters says.

Note that the person or persons due payment are the named insured listed on the declarations page of your insurance policy. If you have a mortgage on your home, the claims check may be made out to both you and the mortgage lender.

"Your lender has a financial interest in your property, and they want to ensure that the necessary repairs are made. They will have to endorse your claims payment check before you can cash it," Worters says. "Depending on the circumstances, your lender may instead want to put the money in an escrow account and authorize payment for the repairs in stages as the work is completed."

How to file a homeowners insurance claim for roof damage

A claim for roof damage is much the same as any claim.

But be aware that your insurance company will carefully review the condition of your roof before making payment. Many insurers point to exclusions spelled out in a typical policy, including wear and tear, deterioration, faulty defect or design, neglect, and pre-existing damage.

"You have to show a covered peril caused the damage that allowed water to enter your home, such as a hail strike, roof tiles lifted in extreme winds, a tree branch falling, or a lightning strike," says Nicole Shacket, supervising attorney for Insurance Litigation Group in Miami.

If a covered peril causes damage to your roof, "you can contact your insurance company and file a claim. Then, the insurer will send an adjuster to your property to inspect the damages," Shacket says. "They may also request documentation, pictures, a recorded statement from you, an examination under oath, or a reinspection before they make repairs or replacements."

How to file a homeowners insurance claim for water damage

While a water damage claim may follow the standard procedure, the coverage depends on how the water damage happened.

"Standard homeowners insurance provides coverage for burst pipes, wind-driven rain and damage resulting from ice dams on your roof. Some policies also cover sewer and drain backups, but many do not," Worters says. "In general, water that comes from the top down - such as rainfall - is covered by a standard policy. Water that comes from the bottom up, such as an overflowing river, is covered by a separate flood insurance policy."

Additionally, your water damage claim may be denied under certain circumstances, such as:

• Lack of maintenance - For example, if you had a leaky faucet and failed to repair it
• A broken pipe caused by wear and tear
• Plumbing system deterioration
• Mold, rotting or corrosion
• Foundation seepage
• Rising groundwater

"Your insurance policy may also include limits for water damage. For instance, some policies limit water damage payments to $5,000 or $10,000," Espinosa says.

Filing a renters insurance claim

Renters will file a claim in much the same way as homeowners. However, f there's structural damage to your rental, notify your landlord immediately. Most leases and states require that the tenant notify the landlord, who is responsible for structural repairs. Those repairs may include a leaky roof, broken window or water damage caused by a plumbing issue.

Your landlord will need to file a claim with their insurance company for damage to the building. You, as a renter, will need to file a claim with your insurer for damage done to your property.

If a burglary has occurred, also notify your landlord. Your landlord's insurance policy should include coverage for any damage that results from the theft, but your renters insurance will provide coverage for your personal property. If there's a burglary at your home, file a police report and document everything and submit this information to your insurer and landlord, if they need to file a claim.

What to avoid when filing a home insurance claim

When filing a homeowners insurance claim, homeowners often make several errors that can delay their claim or affect their payout:

• Document your belongings. Not having enough proof of what property was damaged or lost could delay the process or affect how much you'll receive. Consider photographing or making a video inventory of your home's contents before you have an issue and save it in a safe place. Keep copies of receipts for higher-value items. That way, you'll be able to show what you've lost if and when it happens.
• Don't throw away or discard items too soon. Document your loss with as much detail as you can, and don't throw away any evidence until you agree upon a payout.
• Don't wait too long to contact your insurance company. If you act quickly, you can initiate the claims filing process and get an insurance adjuster to visit your home soon to assess the damage.
• Complete claims forms promptly. The claims process can drag on if you don't provide your insurance company with paperwork for proof of loss, receipts and other documentation to approve your claim. Insurers usually are required to send you claim forms within 30 days, depending on state law. The longer you wait to complete these forms, the longer the process takes.
• Understand your policy. Standard home insurance doesn't include flood coverage, which must be purchased separately through the federal government's National Flood Insurance Program. Note that NFIP policy limits are $250,000 for the property and $100,000 on the contents. So if you need more, you'll need to get excess and surplus coverage, available from some insurers.

How long does it take for an insurer to pay a claim?

Every state can set its own rules for the deadline by which an insurance company can accept or deny a claim.

"In California, insurance companies have 15 days to acknowledge a claim," Worters says. "Once acknowledged and all documentation and proof have been received, they have 40 days to approve or deny the claim. If a settlement is reached, they have 30 days to make the agreed-upon payment."

In Florida, meanwhile, insurance carriers have 14 days to review and acknowledge receipt of communication regarding a claim, according to Espinosa.

In South Carolina, insurance companies are granted a "reasonable" amount of time to either deny or payout your claim.

In North Carolina, insurance companies are required to acknowledge receipt of your claim within 30 days, but there's no set time frame on when they must settle because "each claim is different and the length of time to settle may vary," the state says.

The amount of time required to fully settle a claim depends on the type of claim and how long repairs will take.

When should you not to file a homeowners insurance claim?

Not every incident requires filing a home insurance claim, especially if you're worried about your premiums going up. Insurance companies all have access to a database called CLUE (Comprehensive Loss Underwriting Exchange) that contains information about your claim history.

Filing a claim could increase home insurance rates. A history of multiple homeowners insurance claims over a short period, however minor, can affect your premiums, your ability to obtain new homeowners insurance if you face cancellation, or your ability to find lower rates if you need to shop around.

If the cost of repairs is less than your deductible, it's better to pay out-of-pocket to save money in the long run.

How much will my home insurance rate increase after filing a claim?

Insurance.com found in a 2021 homeowners insurance claim analysis that the average percentage rate increases for home insurance claims are as follows:

What can you do if your homeowners insurance claim is denied?

In most states, homeowners undergo an appraisal process (outlined in their home insurance policy) to resolve a homeowners insurance claims disagreement. In Massachusetts, the appeal process is called a reference proceeding or mini-arbitration. It involves a panel of three referees -- one chosen by the insurance company, another the policyholder selects and a third chosen by the two other referees. Both sides make their case to the panel and the referees then make a binding decision.

Experts recommend first trying the internal claims appeal process available to you through your insurance company. If you can't agree, you can file a complaint with your state's insurance department, file a claim in Small Claims Court or file a lawsuit against your insurance company.

The bottom line? It's important to know how to file a homeowners insurance claim and to weigh the pros, cons and costs of filing a claim before you submit it to your insurer. In some cases, the financial losses are too great to avoid filing, but for smaller losses, paying out of pocket may help you preserve a good claim history and prevent an increase in your premiums.

Frequently asked questions: Home insurance claims

Can you keep your home insurance claim money?

Technically, if you are paid for a claim by your insurance company, you aren't required to spend the money on repairs, remediation or replacement if you own your home outright. But if you pay a mortgage, your lender may require you to use the money to fix or rebuild your home.

Even if you own your home outright or your lender doesn't obligate you to use the claim payout for repairs, think twice before choosing to pocket the money.

"Say you choose to take the claims money, not repair the damage and instead buy a car, for example. If so, your insurance company has every right to amend your policy, exclude damaged property they've already paid out for or even cancel or non-renew the policy altogether. If you do elect to keep the funds and not make repairs, the replacement cost clause becomes null and void," says Ben Galbreath, producer and independent insurance agent with Wallace & Turner Insurance in Springfield, Ohio. "When you sign the application for a standard homeowners insurance policy, you are agreeing to transfer the risk of financial loss to repair or replace any damage to your home and put it back to its original status before the loss or better."

How long does a home insurance claim stay on your record?

Typically, an insurance claim related to a recorded loss remains on your record for three to seven years. If you file one or more claims within this period, your premiums may increase or you could be excluded from coverage.

"Insurance companies tend to look at the frequency and severity of claims. If there is a high frequency - meaning high number of claims - they may increase your deductible, force you to purchase specific coverage elsewhere, change the way losses are evaluated from replacement cost to actual cash value, or cancel your policy entirely," Galbreath says.