People may be hesitant to file an insurance claim for a wide variety of different reasons. The most common reason is because that person feels that their insurance rates may go up to unaffordable levels due to even one small claim. The reality of the situation is that insurance claims are a natural part of the process and may be the only way to help get the money you need depending on the specifics of the situation. When it comes to filing an insurance claim and why the process is so important, one of the key things to understand is how much that claim is going to cost.
Insurance Claim Costs
When talking about homeowner’s insurance, the cost to file an insurance claim will depend very much on the specifics of the policy in question. The cost to the homeowner is dependent on two key things: individual policy limitations and deductible amounts.
Deductibles are the total amount of money that you have to pay out of pocket for a particular claim before your insurance will go into effect. These deductibles are made available to the homeowner well in advance and are typically agreed upon when signing up for insurance in the first place. The average deductible can range anywhere from $250 to $5000 or more depending on the policy. However, the most common are $500 or $1000.
Your deductible should play a factor in deciding when and if to make a claim. If you are filing for a loss of only $100, it may actually be more beneficial to you in the long run to just pay the money out of pocket and avoid filing the claim altogether. If you lose your home to a fire and suffer a total loss, on the other hand, even a deducible of $5000 or more will still pale in comparison to the amount of money that your homeowner’s insurance will pay out to replace all of your goods and belongings.
Some homeowner’s insurance policies also have specific caps on them for certain types of losses. If the type of loss that you have incurred falls into one of these pre-defined areas, you may not necessarily get all of the money you need to rectify the situation – even if your homeowner’s insurance policy is valued at much more.
Mold remediation, for example, is usually capped at $0, $5000 or $10000. If you suffer $20000 worth of damages, have a one million dollar homeowner’s insurance policy but a $10000 cap on mold remediation, you would only receive the capped amount of money and not a dollar more.
Sewer drain backups are also a common category that are usually capped by insurance providers. These are sometimes (but not necessarily always) capped at values like $1000, $5000 or $10000.
If these types of situations are of serious concern to you, it may be worth looking into a different policy that will provide a larger amount of coverage in the event that these types of situations do occur.
Most of the time, however, the homeowner will only be responsible for the cost of the deductible. If you suffer one million dollars worth of damage and have a two million dollar homeowner’s insurance policy with a $5000 deductible, you will only have to pay $5000 to completely replace your home in the event that the disaster fell into an uncapped situation. Your homeowner’s insurance will take care of the rest.
As it relates to pricing for the actual project, restoration companies are required to use a price list called Xactimate. This price list helps ensure that restoration companies are following a “fair” price list that is approved by all insurance companies. The scope of work may vary slightly from restoration company to restoration company, however the line item prices should always be the same. It is important to keep in mind that every project is going to be different and a “baseline” quote cannot be provided on the phone. The job must be assessed by a technician before any kind of pricing can be provided.