What I Learned From My Insurance Claim

It's been a tough month dealing with water damage in our house. But the worst part was the insurance process. If you have been unlucky enough to have to file a claim, I am sure you know the drill. If you haven't, I hope you never have to. I will spare you the drama, and simply share what I learned.

As soon as the damage happens (in this case a burst pipe caused severe water damage), take the steps to fix it immediately e.g. turn of the main water supply and call a plumber. And then before you call your insurance company, dig up your insurance policy and review it thoroughly. Determine exactly what the policy covers and more importantly what it does not cover.

Calling your insurance company is a double-edged sword. If you have extensive damage, you may not have enough money hidden under the mattress for the repairs, and so you will need to file a claim.

If the damage is minor, you are probably better off not filing a claim. Why, you may ask? Because you have to pay the “Dreaded Deductible”! Plus your insurance premiums will probably go up. Suddenly, your decision to take a higher deductible in exchange for lower premiums doesn’t seem like a good idea after all.

But what do you do when you don’t know how major the damage is? And especially when it is water damage and there is concern of mold? This is when it comes in handy to have contacts for a contractor who can quickly come in and give you an assessment of the repair costs.

Use that information to determine if you should file a claim. However, you have to do that before you call the insurance company. As soon as you inform them of the damage, and regardless of whether you file the claim, it goes on your record and your premiums will still go up. At the very least you will lose any “claim free discounts” you previously enjoyed which means that you will now be paying more for your premiums.

Anyway, once you decide to file a claim, call your insurance company and they will walk you through the next steps. Companies have different processes but in general they will ask you questions about the damage, how it happened and how you handled the situation.

It is very important that you demonstrate that you did everything you could to contain the damage and avoid further ruin to the property. Failure to do so can result in a smaller claim payment from the insurance company. So if you have water leak, get a shop vac and dry up the place and air it out. If your roof is damaged, put a tarp on it to avoid water damage in case it rains.

And please don't lie, it ain't right; but even if your conscience won’t keep you up at night, know that you will surely be caught and the consequences are dire. Not only will they deny your claim but filing fraudulent claims is against the law. I doubt you want to go to jail.

So having checked under the mattress and raided the piggy bank, we determined we had enough money for the high deductible and could afford to file the claim . . . only to find out that we needed to come up with more money! What? Why? How did this happen?

Stay tuned for the next post. In the meantime, please let me know what, if anything, I should have done differently.