When should you file a home insurance claim?

Homeowners insurance protects your biggest asset if it is damaged or destroyed. But that doesn’t mean you should always be quick to file a claim.

While your homeowners insurance policy protects against damage, if you file too many claims—particularly for smaller issues—your premiums will increase and your insurance company might decide you’re too big a risk to continue insuring you.

So, when does it absolutely make sense to file a claim? As a general rule of thumb, it should be whenever you suffer major damage that will cost more than your deductible to fix.

Here are some examples of when it is likely best to go ahead and file a claim.

  • There’s very significant damage to your home, or it is completely destroyed
    This is the type of situation for which homeowners insurance was created. If your home is destroyed by fire or is left uninhabitable following a roof collapse, your insurance will help you get back on your feet again.
  • When the repair estimate is more than your deductible
    A pipe bursts in your basement ceiling and floods your recently finished rec room. The cost to repair the damage and associated cleanup is about $7,000 and your deductible – the amount you would pay – is $1,000. In this case, it probably makes sense to file a claim. You’ll still need to pay the $1,000 deductible, but your insurer will cover the other $6,000. Note that if the damage is only a little above the deductible, you might pay more in increased premiums, so take some time to consider whether it might cost you more in the long run.
  • It’s the first time you’ve filed a claim or haven’t done so recently
    When you file a claim, the insurer will report it in the Comprehensive Loss Underwriting Exchange or CLUE. It’s a national database users use to track claim activity. It’s how insurers are able to determine if you may be a high-risk client or a relatively low risk.If you’ve never filed a homeowners insurance claim or haven’t filed one recently, especially within the last three years, your insurer is likely to consider it a one-off event.You may not see any increase in premiums, but if you do, it will have very little impact on your risk rating.
  • You have an endorsement for the damage
    An endorsement on your home insurance policy expands coverage for certain types of loss. For example, a sewer backup endorsement adds coverage for losses caused by a sewer backup to a policy that might otherwise not cover it. Endorsements are generally very reasonably priced insurance add-ons.

When should you not file a home insurance claim?

Just as there are times when filing an insurance claim makes perfect sense, there are situations when it might not be in your best interest. In such situations, paying the cost to repair the damage or replace the items yourself will save you from seeing a jump in your premiums or an increase in your risk rating.

Here are some examples of when you probably shouldn’t file a homeowners insurance claim.

  • The damage is small and doesn’t exceed your deductible
    If you have a $1,000 deductible and the cost to repair or replace the damaged item is less than $1,000 or only slightly more, it makes sense to pay it out of pocket. You won’t risk seeing a premium increase and your risk rating will be unaffected. Just treat it more like normal maintenance or wear and tear.
  • You don’t have coverage for the damage
    Even claims that are denied get reported into the CLUE database and could negatively impact your premiums or future insurability. Filing a claim just to test the waters with your insurer when you know you don’t have coverage could do more harm than good.
  • You have filed several claims recently
    You may not see any impact on your premiums if you haven’t filed an insurance claim recently, but if you filed a series of claims in a short period of time, your insurer will very likely raise your premiums. They might all be very legitimate claims, but you should weigh the benefits with the potential downside before filing.
  • The damage is from normal wear and tear
    Homeowners insurance policies typically include a “failure to maintain” exclusion, which allows the carrier to deny a claim based on lack of proper maintenance or negligence. If you know you have a leaky roof or the shingles are past their rated lifespan and starting to pull away, it’s your responsibility to see that they’re replaced. If the roof caves in because it wasn’t properly maintained, the insurer may deny your claim.

Final thoughts

Your insurance policy is meant to give you peace of mind. If you suffer a catastrophic loss or damage, you can repair the damage or replace your home without going bankrupt.

Just keep in mind that filing a claim has consequences, and filing too often could cost you more in the long run.

Home insurance FAQs

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

Homeowners insurance claims typically stay in the CLUE database for five to seven years, but the exact timeframe that will be considered will depend on the insurer. Some insurers may only look at the last five years while others might consider the full seven-year timeframe. 

The amount of time could also be based on the type of damage that was reported. Larger claims will likely be considered for a longer period.

The Insurance Information Institute says it is always a good idea to pull up a home's claims history report before you purchase it so you can see what damage it may have suffered and whether it has a history of certain types of damage.

Do home insurance claims follow you even if you move?

Moving to a new house or condo doesn’t mean you get a clean slate again. Your claims history remains in the CLUE database and will be considered when the insurance company sets your rates or even considers selling you a policy.

What will happen to your rates if you file a claim?

When you file a claim to repair or replace your home, your rates are very likely to go up. The increase may depend on the dollar amount of the claim and whether you’ve made claims recently. 

Here is how much home insurance premiums increase, on average, for common claims.

Claim typeAverage percent increaseAverage percent increase from two claims
Water damage25%46%