Financial Planning for Your Next Homeowners Insurance Claim

The point of homeowners insurance is to help you get back on your feet after a catastrophe. You don’t hope for anything bad to happen to your home or belongings, but when things go sour, it’s nice to know that you’re covered.

Whether you need to make major repairs, replace lost or broken possessions, or do both, your insurance policy is designed to help pay for some of those costs. That is—as long as you’ve signed up for the right one. If you don’t know what your coverages look like, it can be a real challenge to navigate the insurance claim process. This advice can help you avoid a financial nightmare as you start working through your claim.

Step One: Review your policy

In an ideal world, you should be reviewing your homeowners insurance policy every year to make sure you have the proper coverages in place. Our lives change over time, and the things you own now probably weren’t around when you first enrolled in your policy. Forgetting to insure your high-end items or other valuable collections can be a real problem if a fire or other disaster hits your home.

Should something happen, your claim will go a lot smoother if you’ve taken some time to plan ahead before your event. Hands down, the easiest way to keep yourself free from financial woes with your homeowners insurance claim is to have the right type of policy in place from the start. That’s why understanding your coverages and meeting with your agent every year is so important. You’ll need to update your insurance agent on any life changes to keep your policy up-to-date. Some things can even bring new savings. That new home security system might actually lower your monthly premiums.

Step Two: Run the numbers

Another part of being financially prepared is to have your deductible amount already set aside in a savings account. This is the amount of money you’ve agreed to pay, per your policy, before the insurance company will step in. No matter what kind of trouble has fallen on your home, that deductible is always owed. The trick here, though, is that sometimes your deductible is higher than the claim itself. This is why you have to run the numbers first.

When you know how your deductible works, you’ll be in a better position to figure out how to move forward after an event. For example, your deductible might be a percentage of your home’s total coverage. Let’s say that coverage amount is $300,000. If you have a 3% deductible, then you’ll need to pay $9,000 toward your damages or repairs before the insurance company will (hopefully) pick up the rest of the financial responsibility. If your total expenses look like they’ll be under your deductible amount, whether that’s $9,000 or another number, then you may not want to file your insurance claim at all. Paying for the repairs or replacements costs yourself could save you the hassle of working with your insurance company.

Step Three: Reference a guide

When you know that your claim is going to exceed your deductible amount, it’s time to move forward and get your claim processed. Unfortunately, the steps involved can get a little complicated. That’s why the final part of keeping yourself in the clear is to get some financial guidance from someone who has experience with the insurance world.

One of the best ways to give yourself a leg up is to read advice from actual insurance adjusters. Their “inside scoop” can help you learn about what actually matters for getting the most amount of money possible on your claim. For that, you can turn to Insurance Claim Secrets. This down-to-earth guidebook is designed to give homeowners the confidence and insight they need to handle the claims process without leaving any money on the table. When you can’t afford to lose anything else, following these steps can be a huge asset. Learn more here.