Will Filing a Water Damage Claim Increase My Home Insurance Rates?

Will Filing a Water Damage Claim Increase My Insurance Rates

According to industry research, almost 40% of homeowners have suffered from water damage losses.

This statistic isn’t really that shocking when you think about it.

Just consider all the pipes and appliances in your house connected to a water supply line— sinks, dishwashers, fridges, water heaters, ac units, and so much more.

Appliances and pipes have a limited lifespan, so there’s always a chance of one of them rupturing or springing a leak.

Even if your pipes and appliances are in tip-top shape, we’re human and we make mistakes, such as accidentally leaving the sink faucet running all night.

Thankfully, homeowners insurance is there to cover our butts and replace any damaged property that’s covered by our policy.

But, a lot of people are afraid to use the insurance that they spend money paying for.

We’ve answered some frequently asked questions and provided a guide to make the water damage insurance claim process a little less daunting.

Will a Water Damage Claim Raise My Insurance Rates?

This is kind of a tricky question because when it comes to insurance rates, it’s a mixed bag.

The answer to this depends on a number of different variables and much of it is determined by where you live and what your insurance policy is.

And then you have to factor in the house itself. How old is the property? Is it constructed using a wood-frame or brick? Has the roof been properly maintained?

For instance, homeowners in Maryland can expect to pay a comparatively low national average of $980, but after you file the first claim your rates can jump up to a staggering 19%.

The North Texas area is located in the mouth of tornado alley, so our insurance premiums are pretty high with homeowners paying $1,560 on average.

On the plus side, Texas state law prohibits insurance companies from hiking up the rates for filing a first-time claim (we’re the only state in the U.S. to do this).

According to the Texas Department of Insurance, “an insurance company cannot increase your premium based on a prior appliance-related water damage claim if:

  • the claim has been properly repaired or remediated; and
  • the repair or remediation was inspected and certified unless three such claims have been filed and paid in a three-year period.”

A claim in this instance includes a current claim or a previous claim made on the property.

When Should You Make An Insurance Claim For Water Damage?

Any time you’re experiencing a water damage problem, whether it’s a leak or a home flood, you should call a restoration company FIRST and then your insurance company.

Most insurance companies expect you to contain the situation and prevent as much damage as possible.

If you want to ask questions about costs without officially filing an insurance claim, you can consult with us or with your insurance agent.

Note: when you’re talking to your insurance agent it’s important to make it clear that you’re only asking theoretical questions about filing a claim.

As a water damage restoration company, we’re experts when it comes to navigating the insurance process.

When you consult with us, we’ll assess the damage and tell you if it’s cheaper to make a claim or pay out of pocket.

How To Make An Insurance Claim For Water Damage

Water damage is an extremely stressful situation for most homeowners, and it’s hard to know what to do next. Follow these tips to make the claim process a little more smoother.

1. Call Your Insurance Company ASAP

After you’ve guaranteed your safety, call your insurance company as soon as possible. This is especially important if there have been storms affecting the area, as the number of claims likely increased and you don’t want to get caught in the backlog.

Keep your policy number handy and be prepared to answer any questions about the damage.

2. Take Detailed Notes of Everything

Keep detailed records of information during the initial phone call. This includes the name of the agent you’re talking to, the date, the time, and what was discussed.

Keep copies of any documents you and your insurance company send each other.

3. Document the Damages

Take photos or videos of the damages inside and outside the house, including your foundation. Make an itemized list of damaged items and provide them with receipts if you have them available.

4. Do Some Damage Control

As the property owner, insurance companies expect you to prevent future damages by protecting the property after a loss.

Make quick, emergency repairs, but DON’T throw anything out or try to make permanent repairs before the adjuster is able to estimate the damages. Doing this may void coverage. 

Soak up as much of the water as possible, dry out waterlogged items, and board up any broken windows.

Keep receipts for the cost of these emergency repairs, and if you’ve had to relocate, keep receipts for any travel or lodging expenses. Your insurance company may compensate you for these expenses.

What’s Covered and What’s Not?

Water Damage Insurance Claim Tips

If you want to file a water damage claim, but you’re not sure what your insurance company will cover, reading through your policy is a good place to start.

Look at the section that covers “exclusions.” This is where you’ll find out what your policy doesn’t cover.

Also, pay attention to the “declarations” section. This is where you’ll find information about your policy’s coverage limits.

Insurance policies are filled with legal jargon and can be difficult to decipher, so it’s important to talk to someone who can determine exactly what’s covered by your policy.

If you’re still unsure whether your insurer will cover your claim, ask a water damage contractor, your insurance agent, or a private adjuster.

Word of warning: you’ll have to pay for the price of a private adjuster to come out.

Most insurance policies cover water damage that is sudden and accidental, such as burst pipes or ruptured water heaters.

On the other hand, they tend not to cover water damage caused by lack of maintenance, such as that leaking pipe underneath the bathroom cabinet you’ve been ignoring.

Also, most homeowners insurance policies don’t cover flood damage.

After recent heavy rains and hurricanes—like Hurricane Harvey and Irma—many homeowners mistakenly thought they had flood insurance and were scrambling to file a claim.

However, in the insurance world, water damage and flood damage are considered two different things and traditional homeowners insurance won’t cover water damage caused by natural flooding.

If you live in a flood zone and want to protect yourself from losses, consider purchasing a flood insurance policy through the National Flood Insurance Program.

Consult the following chart to find out what water damage losses are typically covered by most homeowners insurance policies. But remember, each policy is different so it’s important to check with your homeowner’s insurance policy to see what’s covered and what’s not.

Most Policies Cover Water Damage Losses Caused By:Most Policies Do Not Cover Water Damage Losses Caused By:
Sudden and accidental water damageFlooding
Storm, wind, or hail damageLack of maintenance
Sewage backups (if it’s inside the property)Ongoing and repeated leaks or seepage

More Resources on Filing Water Damage Claims: