Top 5 Home Insurance Claims& How to Prevent Them

Everyone has such busy lives these days whether it be rushing to get to work, dropping the kids off at school, taking Andrew to soccer practice or Valerie to her tap dance class or doing a million other things.

Being so busy is a good thing, but it can also be a bad thing. When you are so caught up in the demands and responsibilities of your daily life, it is easy to lose sight of your most precious investment…your home. Just like your kids and work demand attention, so does your home. It needs your help to keep it safe and to protect it from harm. The best way to keep your home protected is to know what the top five claims are and how to prevent them.

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Top 5 Claims:

#1.  Non-Weather Related Water Damage – Sewer Back-Up Claim

#2.  Identity Theft Claim

#3.  Wind& Hail Claim

#4.  Fire Claim

#5.  Weather Related Water Damage Claim

  1. Non-Weather Related Water Damage Claim

Non-weather related water damage otherwise known as interior water damage is 1 of the top 3 reported causes of house damage. Interior water damage is caused by a sudden and accidental discharge from a plumbing system, sump pump, a drainage system or from water below the surface of the ground. Most insurance companies cover you for interior water damage, but not all types of water damage are covered. For example, water back-up from an outside sewer or drain is not typically covered. However, it is a very common claim.

How do you prevent it?

Fortunately, there is an endorsement known as Sewer and Drain Water Damage Coverage which will cover you for back-up and sump-pump failure losses. Be sure you get a good amount of coverage for this, because $5,000 is not going to do much if it costs you closer to $45,000 to repair the water damage. For example, if there is water damage done to your beautiful, new renovated kitchen, you’re going to need around $50,000 worth of coverage to repair the marble flooring, backsplash tiling, oak cabinetry, and granite countertop.

Moreover, with water damage comes mold. Mold is a byproduct of water damage. Luckily, some home insurance companies like Farmers offer Limited Mold Coverage which will provide coverage to covered property caused by or resulting from mold. Mold can quickly devalue your home by discoloring the walls and rotting away the wood, so it is a good idea to get coverage for this.

  1. Identity Theft Claim

You may be asking yourself, what does identity theft have to do with homeowners insurance? Well, did you know that if your identity is stolen and someone gets a hold of your credit cards, bank account information, or travel documents that you can file a claim with your homeowner’s insurance company?

Believe it or not, identity theft is an optional endorsement you can add to your homeowner’s policy.  This endorsement provides reimbursement for expenses related to the restoration of your identity which include but are not limited to an advocate assisting you with services such as calls to financial companies and governmental agencies to resolve the loss event.

So, why do you need protection against identity theft? According to Javelin Strategy& Research, Identity Fraud Study, “there were 13.1 million identity fraud victims in 2015 and $15 billion was stolen?”  These days with all the technological advances, it is getting that much easier for thieves to commit identity fraud. For example, did you know that someone can get your pin code by simply hovering their iPhone thermal camera over the keypad after you finish plugging in your code?

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How do you prevent Identity Theft?

You can take the necessary precautions like creating stronger passwords and shredding credit card statements. Moreover, you could add on an Identity Management Services Endorsement to your homeowner’s policy.

  1. Wind& Hail Claim

Quick fact, did you know the largest hailstone in the U.S. landed in 2010 and measured 8 inches in diameter which is roughly the size of a basketball?

wind and hail basketball

Wind and hail damage done to roofs is one of the most common home filed claims. When it comes to wind& hail, it is imperative that you understand what a wind& hail deducible is. Some companies have a separate wind and hail deductible which could be as high as 5%. Most people think that with a 5% deductible, they have to pay 5% of the damages. But in reality you have to pay 5% of your dwelling coverage. For example, if your dwelling coverage is $200,000, you have to pay $10,000.

How do you prevent paying a 5% of your dwelling coverage for wind& hail damage?

You should have an all perils deductible which is a certain dollar amount beyond which insurance protection begins for the specific event causing a loss. Some companies have a minimum all perils deductible for $1000.

  1. Fire Claim

When it comes to fire damage, if you want to keep your house safe and get a fire claim approved, don’t make these three mistakes 1. Not having a properly working fire detector 2. Smoking in the house 3. Neglecting to tell your insurance company about recent home improvements. If you make any one of these mistakes, you risk the chance of having your fire claim denied.

How do you prevent getting denied when filing a fire claim?

First, make you’re your smoke alarms are working properly. Two, avoid smoking in the house. Three, if you make any changes to the home like increasing the value of it by putting in newer and better appliances let your insurance company know about it, so they won’t screw you when you file a claim. Most importantly, don’t take the responsibility on yourself to repair the damages even it’s as small as replacing the oven because your dog wanted a slice of pizza.

hot dog

  1. Weather Related Water Damage Claim

Have you heard the saying New Jersey is the new Florida? Thanks to storms like Superstorm Sandy and Hurricane Joaquin, New Jersey is no longer safe from weather related water damage. It used to be that if you were 5 miles off the coast you were a risk to insurance companies, but now living further inland like Trenton can be a risk as well. These days a flood insurance policy is a must, but yet surprisingly 87% of homeowners don’t have a flood insurance policy. A #1 misconception people have is: you don’t need flood insurance unless you live in a flood prone area. This is so not true. Heavy rainfall and tropical storms can cause serious damage even if you live at one of the highest altitude spots in New Jersey. One other common misconception people have is: Homeowners insurance covers flood damage. Also, not true. Most homeowner’s policies may cover some types of water damage, but flood damage is not usually covered.

How to prevent it?

One of the best things you can do that will help protect your whole house is having a good stable roof. You can either put on a new roof or renovate the one you have. Not only will a new roof help protect your house, but many insurance companies offer discounts for having a new roof.  There are many local roofing contractors available for you. Moreover, consider purchasing a flood insurance policy. Give me a call if you need help choosing a local roofing contractor or picking out a good flood insurance policy.


By,

The Archer Group – Farmers Insurance Agency

If you have any questions or concerns about common Home Insurance Claims or anything talked about in this article please give Jason Archer a call or shoot him a text at 973-394-0212. He is the principal owner at the Archer Group and has over 10 years of experience in the insurance industry. Feel free to give him a call or schedule an appointment via email (jarcher@farmersagent.com), and he will conduct a full insurance  review of your policy and give you his unbiased opinion. If you prefer to meet him at his office, it is located at 300 Interpace Pkwy, Ste 400B in Parsippany, NJ 07054. Please see map below:

 

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NJ Insurance

NJ Insurance Agent serving the Warren County, Somerset County, Sussex County, Morris County, Essex County, Passaic County, Bergen County, Hunterdon County and Essex County Area.
My name is Jason Archer and I come from a family line of business owners. I support small businesses, business owners and the American Dream.
My one purpose in life is to educate people and provide value for them. I want to help my fellow New Jersey neighbors protect what matters to them most whether that be their car, home, business, motorcycle, RV, boat, or other investment. For example, did you know that 1 of the top 3 reported causes of house damage is water damage? Did know that there is an additional coverage called Water and Sewage Backup Coverage that you can add to your Home Insurance policy which can save you thousands? To boot, there is an additional coverage called Limited Mold Protection which protects your home against mold. Mold is byproduct of water damage that can seriously devalue your home. Interested in learning more ways to protect your greatest assets/investments? Visit: My Website.
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