There are about 135 million housing units in the U.S., 80 percent of them mortgaged by 65 million owners. There are often multiple layers of insurance that can come into play around a single claim.
Most people don’t even really know when or how to file a claim, so they pay for covered repairs out of pocket.
“Insurance is like a parachute,” says the insurance industry, “if it isn’t there the first time you need it, chances are you won’t need it again.” Welp.
Is that really true? And why do we use homeowner’s insurance differently from all of our other insurance? We parse the heck out of our medical insurance, making sure it pays every dime it should. And why not? It’s a contract, that insurance policy. Policy holders agree to pay X, and the insurer agrees to cover X costs.
It’s the same for life insurance. We expect it to pay off, even if it’s many years down the road. And speaking of the road, we also learn how to use our car insurance in a smart way.
So why are we so wary of homeowners’ claims? A survey by Hippo.com showed some results that you probably won’t find even a little surprising. More than half of people surveyed said they’d rather go to the dentist than deal with a homeowner’s claim. Ten percent said they give up coffee for a year to avoid a claims process.
The main reason is because we’re fearful. We worry that our insurer will cancel our policy if we file a claim. We worry our rates will go up. So on average, claims are filed only every 10 years.
But homeowner’s insurance isn’t like car insurance. Rates are often raised across the board by geographic area, rather than by individual policyholder. If there’s a major storm in your area, your rates could go up even if you don’t file a claim.
We also don’t fully understand the terms, and insurers’ do a poor job of keeping up with our true needs. For example, 68% of people believe a standard policy covers sewage backup. It doesn’t. It also doesn’t cover broken appliances, HVAC repair, power surges, costs to comply with building codes, or pipes and wires connecting to utilities, like the majority of us think it does.
There’s too much standard coverage for stuff most of us don’t have, like pewter, paper stock certificates, furs, and crypts (Huh? Yep.) And not enough for the stuff we do have, like electronics, for which coverage maxes out at about $1,500 on standard policies.
We can’t solve all of those problems, but we can help with the most common and most expensive homeowners’ claims, the ones involving weather damage. When damaging weather hits your address, we automatically notify you, and provide the scientific data that supports insurance claims.
Use your insurance. You paid for it. And consider adding WeatherCheck protection, so you know precisely when you have damages.