Homeowners insurance claims are on the rise, up 3.2 percent in 2018 according to a January 2021 study by the National Association of Insurance Commissioners. According to the Insurance information Institute, about one in 20 insured homes has a claim each year, with an average cost per claim reaching as high at $78,838. See the statistics below.
CLAIM STATISTICS
Homeowners Insurance Claims Frequency*
- About one in 20 insured homes has a claim each year.
- About one in 40 insured homes has a property damage claim related to wind or hail each year.
- About one in 50 insured homes has a property damage claim caused by water damage or freezing each year.
- About one in 365 insured homes has a property damage claim related to fire and lightning.
- About one in 425 insured homes has a property damage claim due to theft each year.
- About one in 1,440 homeowners policies has a liability claim related to the cost of lawsuits for bodily injury or property damage that the policyholder or family members cause to others.
Average Cost Per Claim, 2015-2019
With the likelihood of a claim occurrence on the rise, there are some important steps you can take to minimize your losses:
- Record a Home Inventory Video
Use your cell phone to take a tour of the interior and exterior of your home. Open your closets and drawers to view what is inside. A complete list of all your things will be so important if you have lots of damage after a fire or tornado. If you have to rely on just your memory, it is likely you will forget some items and fail to include them in the claims process. - Review Your Policy OFTEN
If you are not covered correctly, you could be in a significant financial deficit after a claim. Check your policy to see if your possessions are covered for their replacement value or actual cash value (value minus depreciation). Ask your agent if your roof will be covered at replacement cost. Be certain that any high value items like jewelry, firearms and art are listed on your policy. - Maintain Your Property
Your property insurance policy is intended for unexpected damage, not neglect. For example, damage from a pipe that suddenly malfunctions is an unexpected and covered event. But damage from a leaky roof that you have been aware of could be denied because you didn’t take any action to stop the damage it was causing. - Wait to Post on Social Media
Social media is the golden ticket for home invaders. Not only can a burglar see that you are headed on a weeklong vacation via your social media post, they also can scope your pictures to see where all the high value items are located in your home. Best to wait until your return to share your vacation memories. - Document the Damage
As soon as a claim occurs or is discovered, pull out your phone and start taking pictures of the damage. This can pay dividends when the insurance carrier is accessing your payout.
If you have questions about your coverage, how a claim is handled, or ideas for a secure place to store your home inventory video, do not hesitate to give us a call.
Duncan McKinnie
W&A Bodiford Agency – Bolivar, TN
*Insurance Information Institute calculations, based on ISO®, a Verisk Analytics® business, data for homeowners’ insurance claims from 2015-2019