Guide on how to evade known home insurance claims

Guide on how to evade known home insurance claims

If you reside in California, a state prone to a wide range of natural disasters, from wildfires to earthquakes, you’d need to go above and beyond to protect your property. While home insurance companies in California provide a financial haven in the event of unexpected damage, they subsequently charge you higher premiums to recoup their losses.

Given this fact, most homeowners are reluctant to make any insurance claims. Nonetheless, it is more prudent to file a claim than to bear the brunt of a disaster alone. Even better, you can avoid home insurance claims by learning how to keep your home safe. Here’s why. A safe home is less likely to incur extensive damage from a natural calamity.

In other words, no damage, no claim! It’s that simple. Is it? Let’s find out below a few case studies and recommended ways to protect your home.

How Home Insurance Claims Work

According to the 80% rule, a good home insurance claim is defined as no more than 80% of the original claim value. Meaning that top home insurance companies in California are willing to fully bear the cost of damage, provided that your coverage is worth 80% of your property’s replacement value or higher. If it is less than 80%, the insurer would cover the damage based on the amount of insurance purchased.

Here’s a scenario. Your three-bedroom condo is worth $350,000 to replace, and you have $200,000 in coverage. A wildfire damages the home to the tune of $150,000. Given that it’s less than the insurance coverage, the insurer should cover the total expenses, right? Not really. Based on the 80% rule, you’d have had to pay $280,000 in insurance to fully cover the loss.

The claim payment is proportional to the actual insurance purchased, which represents its threshold. In this case, that is 71.43% of the damages, as derived by dividing the actual amount paid by the threshold. Hence, the average homeowners insurance California-based companies will pay you $107,145, while your out-of-pocket expense would be $42,855.

The deal-breaker, however, is the future rates on your claim, which may increase anywhere between 9% and 20%. So, here are some ways to avoid home insurance claims.

Common Home Insurance Claims to Avoid

Wildfire

One of the biggest threats to homeowners is wildfire, which can be brought on by improper vegetation, drought or arson. It’s an act of nature that can’t always be predicted. According to reports, the annual recorded cases of wildfires since 2017 average 1,065. In 2020 alone, over 9,900 infernos swept through 4.3 million acres.

The disturbing stats leave most homeowners in a state of panic, wondering what to do in such times. It’s not enough to get the best home insurance in California or elsewhere, you should take the following precautionary measures:

  • Keep all flammable objects at a safe distance. This includes propane tanks, firewood piles, outdoor furniture, and other combustible materials.
  • Reduce vegetation near the house, including dried twigs, leaves, and tree branches. Turf grasses should be fire-retardant, too.
  • Dispose of recyclables and thrash, responsibly.
  • Install smoke detectors and a multi-use sprinkler system in your home.
  • Monitor all kitchen activities, from cooking to cleaning.
  • Use electrical appliances with care.
  • In the event of a fire, use the right techniques and equipment to put it out.

Gale (Strong Wind)

Strong and gusty winds are commonplace in the Golden State, especially during the winter and spring months. In the former, the storms most likely traverse southward, with migratory pressure centres dictating their speed and trajectory. High wind speeds frequently surpass 100 mph (MPH), which wreak havoc on many homes within the state.

If you live in an area prone to such strong winds, safeguard your home with these pointers:

  • Secure all loose objects in the yard and indoors that could become projectiles in high winds.
  • Install shutters or hurricane panels on windows to prevent them from breaking.
  • Ensure your trees are trimmed and healthy to prevent them from being blown over during storms.
  • Keep your roof in good shape with regular repairs and cleaning.
  • Set up a weather radio to stay up to date on any severe weather alerts.

Flood

As severe weather conditions, rising temperatures, and submerged floodplains are frequent in some parts of California, homeowners worry that flood water may flow into their homes and render them unlivable. Flooding is a devastating and complex disaster, which includes subsidence, storm surge, and flash floods.

Here are a few suggestions to protect your property and keep your home insurance claims within reasonable limits:

  • Install a sump pump and make sure it’s in good working condition.
  • Install backflow preventer valves to prevent water from flowing back into your home from the sewer system.
  • Keep all gutters and downspouts clean and clear to allow water to flow away from your home.
  • Regularly check your roof for any damage or leaks, and have repairs done as soon as possible.
  • Avoid purchasing a property that is located on a floodplain or at the bottom of a hill.

Lightning

If you live in California, the likelihood of experiencing lightning strikes is pretty low. This year, however, the state did experience one of its most intense lightning outbursts in years. Residents witnessed over 60,000 strikes within a span of two days.

Lightning storms are, without a doubt, destructive and life-threatening. And if your home is damaged by lightning, you may spend thousands of dollars on repairs. You can prevent this outcome by:

  • Installing a lightning rod on the rooftop and connecting it to the ground with low-impedance cables.
  • Installing a surge protector in your home’s wiring to protect your home appliances from voltage spikes.

Burglary/Theft

Home burglaries happen more often than we think. If your property falls victim to one, the chances are high that the thieves will go on a destructive spree. Among other things, they may destroy your furniture and steal your electrical appliances, jewellery, money, and other personal items. Luckily, you can strengthen your home’s security by following these tips:

  • Install security cameras, motion-activated lighting, and alarm systems.
  • Install security gates and grilles for your windows and doors.
  • Cap your chimney
  • Store your valuables in a safe place
  • Trim your hedges so that burglars can’t hide behind them

Conclusion

Homeowners insurance companies in California can financially protect you, your family, and your home. In turn, they charge you a premium on top of your deductible, which may sit well with you. But this doesn’t mean you should fail to protect your home from damage. Insurers are in business to make profits, so your goal should be to avoid claims that may hike your rates in the future. This guide has provided you with effective tips to secure your home. Try them and you’ll rarely have to file a claim.

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Certain storm damage causes, such as wind, hail, and lightning, may be covered by homeowners’ insurance. Damage caused by floods and earthquakes, on the other hand, is often not covered by a regular homeowners insurance policy. It is critical to study your policy to understand what kinds of storm damage are and are not covered. […]

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Guide on how to evade known home insurance claims

If you reside in California, a state prone to a wide range of natural disasters, from wildfires to earthquakes, you’d need to go above and beyond to protect your property. While home insurance companies in California provide a financial haven in the event of unexpected damage, they subsequently charge you higher premiums to recoup their […]

Read More
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