Most Common Homeowners Insurance Claims

Are you in the midst of closing your homeowner’s insurance? Trying to save every little penny figuring all the insurance questions we always ask ourselves?

Do I need Flood Insurance? What about earthquake? Is there any end in sight for this eternal money spending?

Although we do recommend getting the most comprehensive homeowners insurance you can, let us help with a panorama of the most common homeowners insurance claims so you can see where you can and should try to negotiate when looking for your home insurance.

Wind & Hail

Wind and hail are *the* most common homeowners insurance claims on our types of insurance claim list.  It amounts to 35% of the registered claims!

This category is where tornadoes and hurricane fall under. Since those natural disasters are bound to make severe damages to the home, logically, a lot of homeowner’s file their claims because without the aid of their policy, they wouldn’t be able to fix the problem. In fact, the average wind & hail homeowners insurance claim is to cover damages of $8,500 dollars.

Cities like Miami and Oklahoma City, both part of the worst cities for natural disasters – the former for hurricanes and the latter due to tornadoes – are among the cities that file the most homeowners insurance claims related to wind and hail, so if you live in the tornado alley path or in areas where hurricanes are common, just forget it. If you live in places where hurricane and tornadoes are not common and your house is fairly secured and secluded from wind gusts – and that’s a big “if”, ok? – then, okay, you can think about toning down this part. But chances are your local insurance company has done that already. They focus their money where the risk is. The wind & hail portion of a policy in a place where wind & hail are not likely to happen is almost a “bonus”, so discarding it or lowering will not do too much of a difference in the end.

Water Damage & Freezing

Although less activated – coming in with a still high 29% - this is an even more expensive homeowners insurance claim than the previous, with an average of almost $10,000 per claim.

Water Damage & Freezing leads to pipes burst and leaks, which can lead to short circuits that pose a serious risk to appliances and the people in the household. Not to mention mold and other indoor allergies the could creep up on you. So, you know what that means, right? Personal property insurance damages and also liability insurance damages.

Fire and Lightning Damage

While, with 23%, this homeowners insurance claim is only the number 3 of our types of insurance claims list, it is the most expensive one. By far! Will you believe if we tell you the average damage connected with this homeowners insurance claim is something like $44,000 dollars?

It’s not that crazy if you think about. Lightning can strike a tree nearby a house, and make it fall down hard over it, or fall down over the power lines and cause a fire – or do both things at the same time! And a fire, well… it consumes the whole thing. If you are able to stop it, you will still have a thick bill to pay when repairing the structure, if you aren’t; you won’t have a home at all, and the bill to get a new home from the ground up can be even more expensive, right?

The thing is: while lightning is a natural occurrence, fire can be created for a bunch of stupid reasons - have you heard of that guy who caused a massive wildfire while doing one of those silly “baby gender reveals”? So, the moral here is: even if you do not live in a wildfire-prone area; make no economy here. Don’t play with fire! And get lightning protection for your home!

With a drastic drop, it’s almost as if we can’t really call this a common homeowners insurance claim. Non-Theft property damage only amounts to 7% of claims. But, truth be told, this is a mix bag of claims. A baseball that shatters a window, a clumsy neighbor or visitor backing their car up slamming your garage door and clumsy people breaking things in your house structure; all of this and more is included in this category, which makes it difficult to even get a clear picture here and say “yes, save on this one” or “no, don’t get rid of this coverage”.  

Liability

Well, it’s a good thing that liability claims are rare, right? That means people are being responsible within their household. Moreover, liability claims tend to be extra expensive, coming in second behind fire and lightning with an average cost of $22,000 per claim but much much more when you account for the stress of having to deal with someone accusing you and your house of damaging their lives. No one likes to deal with accidents within their homes.

Liability accounts for 4% of the registered homeowners insurance claims but we definitely do not recommend you trying to save money here because while the average is 22k, claims can be pretty elastic as homeowners file them right after the incident not knowing the size of the damages that are going to be asked by the victim and their lawyers. Trust us: you don’t want to be caught on the bad side of it, having to pay $100k or worse!

Theft

Isn’t it surprising that theft and vandalism come last in our types of insurance claims list? We can bet this is the one that most people feel they really need but with only 3% of the claims, it’s definitely not a very common one.

And maybe even more surprisingly, it’s a somewhat low average claim cost too: $4,000. But the truth is that we tend to be controlled by our fears, so we don’t notice that, with so many reliable home security systems put in place (plus homeowners associations strict guidelines to prevent theft and robbery) it has become harder and harder to commit those crimes.

Homeowners insurance claims statistics: the big picture

Having shown all this alarming data, let’s reduce the gears and slow down that heartbeat of yours. While those are the most common homeowners insurance claims, ironically, filing them is not so common. Annually, lower than 10% of Americans with homeowner’s insurance file a claim to their insurance company.

Does that mean that hazards do not occur that much and, in fact, that’s a sign you should not pay for home insurance? No! Not at all.

It probably means that a lot of people do not file claims because they understand it’s better to privately deal with the damages as a way to not raise their home insurance premiums. It means that they understand bigger risks are possible and, once they come, it’s better to let the insurance company pay for it. It means, at best, that near insolvent damages are covered by the insurance policy and the rest are handled by the homeowners.

Is that comforting? Not so much, right? But it is what it is.

Homeowners Insurance – and any type of insurance, really – are there as a safety net, we pay for it to help us when all other options are exhausted. So, to close it all, by all means, read our affordable home insurance guide for real estate homeowners and learn how to cheapen every penny possible, but under no circumstance refrain from having the best homeowners insurance your pocket allows you.