In the United States, a large percentage of homeowners carry homeowners insurance, even though they aren’t required to. However, home insurance is still important if you want to be able to obtain a mortgage and is quite beneficial in terms of the protection it provides homeowners. That being said, home insurance plans typically cover three major elements – structural damage to a home, personal property damage, and liability coverage. However, there are damages that the homeowner’s insurance does not cover, and we will also discuss those. For this reason, today, we will talk about the most common homeowners insurance claims.
Wind And Hail Damage
Wind and hail damage accounts for nearly all homeowner insurance claims in parts of the United States, where the weather is frequently severe. Such claims make up almost a third of all insurance claims, making them the most common. This category includes the damage that happens as a result of hurricanes and tornadoes. However, it also covers the damage that occurs during less severe weather, such as thunderstorms. It’s not surprising that it ranks first in terms of frequency.
However, the severity of damage caused by bad weather can vary significantly from case to case. Nevertheless, it is not uncommon for the repairs to exceed the insurance deductible, making it necessary to file a claim. Although wind and hail account for more than a third of all homeowners insurance claims, they are not the most costly, costing an average of $10,500 per claim.
Water Damage and Freezing
Like the previous cause of homeowner insurance claims, water damage and freezing account for nearly a third of all insurance claims. This is likely the most common household issue that most occupants encounter at least once every couple of years. This type of water damage involves more than one of every five homeowner insurance claims. However, depending on the type of insurance policy you get, these claims may be slightly more expensive than weather-related insurance claims, averaging around $11,000. Given how frequently these problems occur, it is remarkable that it only costs that much. Frozen pipes will burst, causing flooding. So, especially if you are moving and want to avoid all the moving stress, it’s best to get this kind of insurance.
Accidental Property Damage
A tree crashing through your roof, a baseball smashing your window, or a garbage truck driving into your brand-new garage are all examples of accidental property damage. Due to the enormous variation, the average cost of these claims isn’t substantial. You can expect it to be anywhere between $4,000-$6,000. So, if you own a rental too, you can secure it with this ensurance.
Fire Damage
The third most common cause of insurance claims, fires, are also the most expensive. The claim will probably be somewhere around $80,000. Given fire’s destructive potential, the price tag makes sense. The good news is that you can easily obtain fire protection insurance. Fire safety was the initial motivation for the creation of home insurance. However, as previously stated, fire has the potential to destroy everything you own quickly, and that’s why it’s so expensive. Furthermore, because fire-related home insurance claims account for roughly a quarter of all claims, they are not just costly but common as well.
Theft
A strong security system is a must-have for any modern home. However, even if you own an excellent security system, it is sometimes impossible to prevent theft; thus, homeowner insurance also covers this issue, but only in some cases. In reality, theft accounts for less than 1% of all insurance claims and costs an average of $4,300. Consider implementing a home security system to lower your chance of theft even more. Some insurance companies even give premium reductions for doing so!
Liability
Liability is a broad concept that you can apply to almost anything. However, if it has to do with your home, homeowner insurance covers it. You need to understand that liability usually refers to your obligations to other people. So, if you have someone over at your house and they get hurt, you could be held liable for their medical bills. Liability claims had the highest average cost, at $30,000, trailing only fire claims. The good news is that most home insurance policies cover liability.
What Home Insurance Doesn’t Cover
Unfortunately, homeowner insurance is not going to be able to cover everything. Depending on where you reside and the type of insurance you have, you may be unable to file a claim. For example, in hurricane-prone regions in the South, you need to acquire separate wind and hail insurance coverage. The following events are usually not covered by a general homeowner insurance policy.
- Earthquakes: Parts of the country in earthquake-prone regions require special insurance policies that cover earthquake situations alone.
- Sinkholes: Regions that tend to have many sinkholes also require special insurance policies that focus on sinkholes only.
- Flooding: Depending on where you live in the country, you may need to obtain flood insurance separately through a private flood insurance provider, or you may not need to obtain it at all.
Not everything is covered
As you can see, most of the damage that isn’t covered by homeowner insurance is caused by natural disasters. However, it also doesn’t cover damage that you do to your own home. For instance, if you signed up for homeowners insurance on a newly purchased home and you or your movers damage it while moving in, your policy will not cover the damage.
Determine whether or not you need homeowners insurance claims
Now that you know the most common homeowners insurance claims, you will be able to determine whether or not your situation is unique. Paying for insurance may appear to be a waste of money, but if you’ve ever dealt with any of the issues we’ve discussed here, you know how frustrating it can be to deal with them on your own. That is why having a backup plan in the form of homeowners insurance is always a good idea.