When your home or business experiences water damage, it’s natural to feel overwhelmed. Between the mess, the potential loss of valuables, and the stress of cleanup, many people wonder what their next steps should be. One of the most common questions we get at 1st Call Disaster Services is: “If I file a water damage claim, how will it affect my insurance policy?”
Dealing with unexpected premium increases or complex documentation is understandably frustrating. But understanding how a claim can impact your policy can help you make a smart, informed decision. We’ll explain this in simple terms so you can concentrate on what’s most important: getting your property and peace of mind back.
Key Takeaways
- Filing a water damage claim can increase your insurance premiums.
- Multiple claims in a short time may lead to non-renewal of your policy.
- Claim history follows the property and can affect future buyers or coverage.
- Minor damage close to your deductible might be better paid out-of-pocket.
- Water damage from sudden incidents is usually covered, but floods are not.
- Insurance companies use CLUE reports to track water damage claim history.
- Filing a claim may result in the loss of any “claim-free” discount you have.
- 1st Call Disaster Services helps with damage documentation and works directly with your insurance provider.
- Always review your policy and speak with your agent before filing.
- Trust professionals to help guide your decision and reduce stress during cleanup.
Understanding How Homeowners Insurance Covers Water Damage
First, it helps to know what kinds of water damage are typically covered by insurance. Most standard homeowner’s insurance policies cover sudden and accidental water damage, such as:
- A burst pipe
- A malfunctioning appliance (like a washing machine or water heater)
- An overflow from a toilet or sink
- Water damage caused by fire suppression efforts
Insurance usually does not cover damage resulting from poor maintenance, gradual leaks, or flooding from external sources (like rain or rising rivers). Those typically require a separate flood insurance policy.
What Happens When You File a Claim?
When you file a water damage insurance claim, here’s generally what happens:
- You contact your insurance company and provide details about the incident.
- An adjuster is assigned to assess the extent of the damage.
- Your claim is approved or denied, depending on the cause of the damage and your policy’s coverage.
- You receive a payout, minus your deductible, to cover the cost of repairs or restoration.
This is where 1st Call Disaster Services can step in. We can work with you and your insurance company to make the claims process smoother and help ensure you receive the compensation you’re entitled to.
How a Water Damage Claim Affects Your Policy
Now to the heart of the matter: how does filing that claim affect your insurance policy? Here’s what you need to know.
1. Premium Increases Are Possible
Filing a claim may, in fact, cause your premiums to go up. Insurance companies base their rates on risk. If you’ve had a claim (especially a costly one), you may be viewed as a higher risk.
That said, not every claim results in a premium increase. If it’s your first claim, or the amount is relatively low, your provider may leave your rate unchanged. Each company has its own formula.
2. Too Many Claims Can Get You Dropped
Insurance is there to protect you, but multiple claims in a short span of time may raise red flags. In some cases, especially with multiple water damage claims, your provider may decide to not renew your policy.
We recommend speaking with your insurance agent to understand how frequent claims are viewed and what thresholds they consider “too much.”
3. Claim History Follows the Property
Here’s a lesser-known fact: water damage claims can affect not just your policy, but the property itself. Insurers use something called a CLUE (Comprehensive Loss Underwriting Exchange) report to track claim histories.
If you file a water damage claim, it goes on the CLUE report and stays there for up to seven years. If you decide to sell your home, a history of water damage could be a red flag for buyers or even impact the insurability of the property in the future.
4. You May Lose Claim-Free Discounts
Many insurance policies offer claim-free discounts to policyholders who go a certain number of years without filing a claim. Filing a water damage claim may cause you to lose that discount and pay more on your next renewal, even if your base rate doesn’t go up significantly.
When Should You File a Claim?
Filing a claim makes sense in many situations, but not all situations. Ask yourself a few questions before making that call:
- Is the cost of repair significantly higher than your deductible?
- Is the damage covered under your policy?
- Have you filed other claims recently?
For example, if your deductible is $1,000 and the repair cost is $1,200, it might make more sense to pay out of pocket rather than risk a rate increase.
If you’re unsure, we recommend calling your agent for guidance, or better yet, reach out to us at 1st Call Disaster Services. We can assess the damage and help you determine whether filing a claim is your best option.
How 1st Call Disaster Services Helps During the Claims Process
We’re not just here to clean up the mess. We’re here to guide you through the process from start to finish.
- We assess the damage thoroughly and provide detailed documentation.
- We work with your insurance adjuster to ensure all damage is accurately reported.
- We explain your coverage in plain language, so you know what to expect.
- We handle the restoration process quickly and professionally, so you can get back to normal.
Our goal is to make your experience as stress-free as possible. We know the ins and outs of the insurance world and can help you avoid common pitfalls.
You’re Not Alone. We’re Here to Help
Water damage is stressful enough without having to navigate confusing insurance policies on your own. At 1st Call Disaster Services, we’re not just restoration experts. We’re your partners in recovery.
If you’re dealing with water damage and wondering whether you should file a claim, give us a call. We’ll walk you through the process, explain your options, and get started on restoring your property fast.
Let’s get your home or business back to normal. Contact 1st Call Disaster Services today.
