Common Home Insurance Claims and How to Prevent Them
Home insurance claims are more common than many people think. Each year, one in fifteen homes makes an insurance claim. Most of these claims are because of property damage from wind, hail, water or theft:
Most Common Home Insurance Claims
(Per 100 house insurance policies):
Wind and hail: 3.13
Water damage: 1.86
All other property damage: 0.99
Fire, lightning, and debris removal: 0.38
Bodily injury and property damage: 0.10
Medical payments: 0.04
Credit card: Less than 0.01
The most common homeowners’ insurance claims can be expensive, too. For instance, the average claim for water damage was $7,958, and wind and hail claims averaged $8,041 each year. Topping the list was fire and lightning damage, with each claim costing a whopping $39,791.
Average Cost of Some Common House Insurance Claims:
Fire, lightning and debris removal $39,791
Bodily injury and property damage $20,453
Wind and hail $8,041
Water damage and freezing $7,958
All other property damage $4,800
Surprisingly, many home insurance claims are for damage that could have been prevented.
How Making an Insurance Claim Can Affect You
Making a home insurance claim can be a nuisance. Many homeowners haven’t needed to use their insurance policies, so making a claim for the first time can be stressful. Does the insurance company cover this type of damage? How hard will it be to get it covered? How long will it take?
There’s a financial impact, of course. Homeowners who make a claim are still responsible for the cost of their deductible, which can range from $500 to $10,000. Your deductible might be set as a percentage of the home’s value as well, and in the high-value real estate market of the Greater New York area, that can mean very high deductibles.
However, there are other impacts, too. Here are four of the biggest impacts to watch out for if you need to file a claim:
1. Your Premiums Can Increase
Many homeowners don’t make a claim because they’re concerned about increased premiums.
Although a single claim won’t usually drive up your premiums, multiple insurance claims will raise a red flag for insurance adjusters. Expect to see higher premiums if they consider your home high risk.
There are a number of things that can raise premiums for your homeowners’ insurance, but pets and swimming pools are two of the most common. That’s because both can result in major insurance claims for injuries and accidents. Although these may not be related to the claims you’ve made, expect to see your insurance go up if insurers notice pets, pools or other red flags.
2. Home Insurance Can Be Canceled or Not Renewed
Another big concern is having a homeowners’ insurance policy canceled.
Filing multiple claims can also put your policy at risk for non-renewal. Every insurance policy has different standards for how many claims they’ll allow before they consider refusing an insurance renewal. If the damage is less than your deductible, it may not be worth filing a claim.
Insurers may also look into your home maintenance. Not maintaining your home can result in your insurance being canceled. That’s because most homeowners’ insurance policies have a maintenance clause, which requires you to provide reasonable maintenance for your home.
One surprising issue is homeowners’ insurance that gets canceled after a claim for water damage. Some homeowners have reported that their insurers cancel coverage because of concerns about future claims from mold. However, other insurance companies cover claims for water damage without increasing premiums or cancellations.
3. Making a Claim Takes Time and Energy
There’s often the hassle of negotiating with an insurance company after you’ve filed a claim. An insurance company may take several weeks to send an adjuster out to inspect the damage, and it can take even longer for your claim to get paid. In the meantime, you’ll be on the hook for any expenses.
The time and energy it takes to complete an insurance claim seems to increase as the damage goes up. About six percent of claims are for more than $30,000 in damages. This small group had the hardest time getting their claims approved, though. Forty-one percent of the people who filed these high-value claims reported slow payouts, delays and disagreements with the insurance company over the cost of the damage.
4. Your Claim Might Be Denied
There’s also the possibility that your claim will be denied. Your insurance company may try to deny certain claims by saying the damage is the result of normal wear and tear. One attorney tells the story of an insurer who tried to deny a claim for water damage from burst pipes as the result of normal wear and tear.
Insurance claims can also be denied if you didn’t meet your obligations. If your insurance requires you to maintain your property, your claim can be denied if they find evidence you haven’t been maintaining it.
There are also many types of claims insurance companies don’t cover. For instance, many insurance policies have riders that deny coverage for damage from earthquakes, floods or landslides. Other common exclusions that result in denials are mold damage and high-value items like jewelry.
Avoiding Home Insurance Claims for Water Damage
Some claims are completely unavoidable. These accidents, which are outside of human control, are usually called “Acts of God.” Tornadoes, earthquakes and lightning strikes all fall into this category.
Another example that falls into the “Acts of God” category is the Florida sinkhole that made the national news in 2013, after it engulfed a house with the owner still inside.
Here in New York, we’re familiar with these disaster-related insurance claims. Between Hurricane Irene in 2011 and Superstorm Sandy in 2012, New York homeowners have had more than their share of disaster-related damage. In fact, between 2010 and 2013, a stunning 35 percent of homeowners’ insurance claims were disaster related.
The recent number of catastrophe-related claims is unusual, though.
The vast majority of insurance claims don’t result from disasters. Between 1997 and 2010, only 12 percent of all claims were related to catastrophes. That means nine in ten homeowners insurance claims could have been prevented.
One of the biggest categories of homeowners’ insurance claims, water damage, can be prevented with periodic inspections and routine maintenance. Mr. Rooter of Syracuse offers a no charge plumbing checkup that can help you identify trouble spots and prevent major homeowners’ insurance claims.
We’ve put together a list of seven of the most common home insurance claims for water damage and what you can do to prevent them. We’ve also included signs that they’re likely to occur and when you should look for a plumber’s help.
Read on to find out more about how you can prevent home insurance claims for water damage:
1. Water Damage From Washing Machine Hoses
Broken or leaking washing machine hoses are one of the most common types of water-related insurance claims. These claims are also costly. The average claim for water damage from a broken washing machine hose totaled over $6,000.
Washing machine hoses connect the washer to your water supply lines. The water supply line to a washing machine is always on, which means water will leak until someone discovers the problem — and these leaks aren’t minor. Once a washing machine hose fails, water will flood out of the burst hose at about six gallons a minute. That means a broken water hose that’s gone unnoticed for just an hour will release more than 650 gallons of water into your house!
Washing machine hoses fail for several reasons, such as:
- Exposure to rapidly alternating temperatures
- Installation errors
- Poor construction
- Not enough room between the washing machine and the wall behind it
Over time, almost all washing machine hoses will fail. In one study, 80 percent of washing machine hoses failed before they were ten years old. That’s why it’s important to regularly inspect and replace them.
How to prevent it
The best way to prevent a home insurance claim of this problem is to inspect your washing machine hoses and replace them before they fail. Washing machine hoses are located directly behind your machine, and they connect to the water supply in the wall. Check the hoses that connect to both your hot and cold water supplies.
Inspecting a washing machine hose is quick and easy. But what should you look for?
Signs of imminent failure in a washing machine hose include:
- Blisters, bubbles or bulges in the hose
- Cracking or sharp kinks in the hose
- Rust on the connections
- Discoloration on the hose or connections
- Moisture or drips
If you see signs that your washing machine hose is likely to fail, it’s important to replace it immediately. You should also replace hoses as they age, regardless of whether you see signs of imminent failure. The useful life of a washing machine hose is just five to seven years.
If your hose is older than that, it’s probably time to replace it. A new washing machine hose usually costs less than $10 and can prevent more than $6,000 in damage.
2. Mold and Water Damage From Bathtub and Shower Leaks
Another common home insurance claim is for bathtub and shower leaks. This problem brings additional complications for homeowners, though. It’s harder to get a claim paid for this type of water damage than it is for water damage from a broken hose.
There are several reasons why these claims are more complicated. For instance, if the bathtub or shower was improperly installed, the insurance company many try to deny coverage because of faulty workmanship. If there’s mold present or the risk of mold in the future, they might not cover the damage, either. Additionally, if they can prove that the homeowner knew about the damage and ignored it, they might not do anything as well.
So what can you do to stay on top of these problems?
How to prevent it
Water damage from showers and tubs usually have just a few sources. Almost all of these leaks are due to leaks in the sealant or grout, or a simple lack of sealant. There are several places where these issues show up. These are:
- The grout in the tile surrounding the tub
- Leaks in the corners of the tile surround
- The connection where the tile meets the tub or shower pan
- Leaks in the seal around the drain or drain overflow
- The valve in the wall
- Leaks in the hot or cold water feeds
- Around the shower head or bathtub faucet
If the problem is in an easy-to-see area, you may be able to diagnose and fix the problem yourself. Look for cracks in the caulking around the drains, showerhead and tub faucet. If you see cracks or discoloration in the caulk, this is a likely source of the leak, and these areas will need to be resealed.
If you suspect that the leak is behind the wall, you may want to consult a plumbing professional. We can help you find and fix these leaks. We’ll also help you figure out what type of damage has already been done.
3. Leaking or Overflowing Toilets
Leaking toilets are another major cause of insurance claims for water damage in homes. Like washing machines, toilets are connected to an “always on” water source. That means a leak or break can result in significant water damage. If the water that overflows from the toilet contains sewage, it can also be dangerous.
Toilet failures are expensive, too. The average cost of water damage from a leaking or broken toilet was $5,500. If the toilet is located on an upper floor, water can trickle down to the rooms below it. This causes even more water damage.
Water damage from toilets can have several causes. First, and most common, is that the toilet simply overflows. In some cases, this can be fixed with a plunger. In more complicated situations, though, you’ll need a plumber to help clear the blockage.
Other causes of leaky toilets:
- The wax ring beneath the toilet fails
- The flange beneath the toilet is cracked or too low
- Seals around the valves have failed
- The toilet itself has cracked
How to prevent it:
If your toilet is already leaking, you have a few choices. If the wax ring or the flange is damaged, you may be able to replace them. However, if the toilet itself is damaged, it’s usually easier to replace it than it is to repair it.
There are also some ways to prevent leaks from occurring. The first, and most important, is to inspect your toilet periodically:
- Inspect the fill, supply and flush valves at least twice a year. Look for leaks or discoloration.
- Consider replacing older screw-type valves with newer ball valves, which are less likely to leak.
- Check to see whether the bolts at the base of the toilet need to be tightened.
- Have a professional inspect your toilet and its valves for leaks.
4. Hot Water Heater Leaks
Hot water heaters cause countless insurance claims each year. Like washing machines, they can release a lot of water when they fail. Unlike washing machines, however, a water heater’s leak is often much slower — which means it’s less likely to be noticed immediately.
Last year, a 30-gallon water heater caused more than $100,000 of damage when it burst in a government building in Pennsylvania. Residential water heaters, which are often larger, can do significant damage as well.
How much damage a leaking water heater can do depends on where it’s located. If your water heater is located inside your house near drywall or carpet, the damage can be significant. If it’s in the garage, the damage is usually less extensive.
Signs that a water heater is about to fail are also harder to spot than they are with other appliances. Look for:
- Water that doesn’t get as hot as it used to
- A metallic taste to your water
- Rust on the outside of your water heater
- Discoloration or mineral buildup on the pipes leading to and from your water heater
- Crackling sounds while the heater is warming water
How to prevent it
You can prevent water heater leaks and damage with the following tips:
- If your water heater isn’t already in the garage, consider moving it.
- Inspect your water heater regularly for signs that it’s about to fail.
- Put a drip pan beneath your water heater.
- Replace your water heater when it’s nearing the end of its life. Most water heaters have a lifespan of eight to 12 years.
- Flush your water heater twice a year to eliminate buildup of sediments inside it.
5. Water Damage From Refrigerator Leaks
Refrigerator leaks are less common than water heater or washing machine leaks, but they can still do significant damage. Because the areas most likely to leak are behind or underneath the refrigerator, a slow leak often isn’t noticed. By the time someone notices the leak, the damage has already been done.
There are several sources for refrigerator leaks, and each type of leak needs to be dealt with in a different way. However, regular inspections and maintenance can go a long way in preventing these leaks from happening.
Refrigerator leaks can come from:
- A clogged or blocked defrost drain. This is one of the first things to check if you notice water leaking from underneath the refrigerator. Another sign of a clogged drain is ice buildup in the freezer. Clogs in the defrost drain is one of the most common causes of refrigerator leaks. The defrost drain is usually located on the bottom back inside the freezer. Because it’s small, particles of ice and food can block it up easily. If you can see the drain, you may be able to repair this problem yourself. If not, call someone to service it. You’ll prevent water damage to the floor under the refrigerator.
- Water line connections to the ice maker or water dispenser. If your refrigerator has an ice maker or water dispenser, you may notice water leaks. If you suspect that one of these connections is a problem, look for signs of water inside your refrigerator. Water line connections often leak inside the fridge, and these leaks usually happen because of a loose connection, broken seal or damage to the water line itself. Leaks in the line from the water supply should be handled quickly — water will continue leaking even if you’re not using the water dispenser or ice maker.
- Broken or damaged drain pans. This is a less common cause of water damage from the refrigerator, but like a clogged defrost drain, you’ll usually notice a puddle of water underneath or directly in front of the refrigerator first. The drain pan often holds a small amount of water, and it should evaporate quickly. If your drain pan begins to overflow or leak, you have a problem. Check the drain pan for cracks or other signs of damage.
6. Slow Water Damage From a Leaking Sink
Leaks under the sink can do a lot of damage, too, since they’re usually slow leaks that aren’t noticed for a long time. By the time they are noticed, leaking water has usually already damaged the cabinets. If the leak is bad enough, the floor beneath the cabinet could also be damaged.
If a leaky sink isn’t fixed quickly, it can easily progress from simple water damage. Because these are usually slow leaks instead of floods of water, it’s a common source of mold. If you have wood cabinets or vanities, rotted wood is also likely.
Both bathroom and kitchen sinks can develop slow leaks in the pipes under the sink. Most often, these leaks occur at the valves or the connections between different pieces of pipes. If there’s a leak in one of the supply lines, finding the source of the water is usually pretty easy. If the leak is in the drain line, though, you may not notice a problem unless you’re using the sink. If you don’t see water leaking from the pipes, look for discoloration on the pipes, rust, and mineral buildup to find the source.
Leaky sinks can also happen when the faucet or sink drain fails. You may notice water pooling near the sink when you turn it on or see water dripping down the back of the faucet. This can be a good sign that the faucet is the source, but faucet leaks aren’t always so easy to spot. If your faucet is leaking, however, you may need to replace it.
How to prevent it
You can often prevent leaks around your sink areas if you:
- Regularly inspect the area around your sink and beneath your sink for leaks or water damage
- Make sure connections in the P-trap are tight
- Replace a leaky faucet as soon as possible
- If you notice leaks, place a bucket or rags under the sink right away to prevent further damage
- Get a plumbing check up to look for signs of leaks or water damage
7. Leaks From Your Dishwasher
If it’s not maintained or if something breaks, your dishwasher can also be a source of water damage. Like leaks from the refrigerator, water leaks from a dishwasher can often go unnoticed for years. That’s because the tile usually provides a lip in front of the dishwasher that prevents water from spilling out onto the kitchen floor, where it’s visible.
Underneath the dishwasher, though, a slow leak can rot the floor or cabinet. It can also cause mold or odors.
There are two areas where dishwashers tend to leak, and each problem needs a different solution. The first area is directly in front of the dishwasher. This is usually caused by damage to the seal around the door. The seal around the door is usually made of soft rubber, which can also get dry and brittle as it ages. If your dishwasher door seal is leaking, it will need to be replaced.
The second, and harder to spot, source of water leaks is from the components inside the dishwasher. The pump is one of the most likely suspects for under-dishwasher leaks, but hoses and the connectors to the inlet and drain valves can also be the cause. Finally, damage to the spray arm or float switch can cause the dishwasher to overflow.
Repairing a dishwasher is best left to professionals. Because dishwashers use both electricity and water, the risk of electric shocks is much higher than it is with other types of appliances. If you notice leaks underneath your dishwasher, contact a plumber like Mr. Rooter for repairs instead of attempting to do it yourself.
How to prevent it:
- Look behind the kick plate for water leaks every six months or so
- Check in the cabinet under the kitchen sink (usually right next to the dishwasher) for leaks from the dishwasher
- Inspect the dishwasher seal for damage or brittleness
Other Major Home Insurance Claims and How You Can Prevent Them
Getting a plumbing check up and staying on top of plumbing repairs is one of the most effective ways to prevent home insurance claims from water damage— but there are a few other types of home insurance claims you can prevent as well.
Read on to find out how to prevent three of the most expensive insurance claims caused by other types of damage.
Cooking fires are one of the biggest causes of home insurance claims. These fires can cause a lot of damage quickly. Between 2009 and 2013, cooking fires caused an average of $1.1 billion in direct property damage.
Luckily, preventing cooking fires is a straightforward job. Most cooking fires start because food is left unattended while the stovetop is on. It’s no surprise, either — it’s easy to get distracted by other things while cooking. Just a few minutes out of the room can result in a big fire. That may be while insurance claims for cooking fires spike around Thanksgiving and Christmas, when there are a lot of things to distract cooks.
How to prevent it
It’s generally easy to prevent a cooking fire in your kitchen. Make sure you:
- Stay aware while you’re cooking
- Don’t leave the room while the stovetop is on, particularly if you’re cooking with oil
- Keep oven mitts, towels and other flammable items away from the stove
- Don’t leave food packaging on the stove while cooking
- Keep a lid near the stove in the kitchen. If a grease fire starts in a pan, for instance, cover the pan with the lid to put it out.
- Make sure you have smoke alarms near the kitchen, but not directly above the stove. About ten feet away from the stove is a good distance to reduce false alarms.
Electrical fires are one of the most common causes of fire damage to homes. A home’s electrical system is rarely upgraded, and we use an increasing number of electrical appliances each year.
Fire-related home insurance claims are also one of the most expensive.
Although electrical fires are hard to avoid entirely, there are many things you can do to reduce your risks. These range from small behavior changes, like drying your hands before plugging something in, to major investments like upgrading your electrical system.
There are four major areas where electrical fires occur: outlets, extension cords, appliances, and your home’s wiring system. If your home’s wiring system was installed before 1960, it’s a good idea to look into upgrading it.
1. Extension cords
Damage to extension cords is one of the biggest causes of electrical fires. Extension cords endure rougher handling and more movement than other appliance cords. That means the casing frays easily, and sparks can quickly start a fire.
How to prevent it
You can help to keep extension cord fires from happening by:
- Checking your extension cords regularly for damage to the casing. Signs of damage include fraying, discoloration and broken rubber (particularly near the connections). Replace these cords quickly.
- Unplugging extension cords when they’re not in use.
- Making sure extension cords aren’t placed on top of other flammable items like papers or blankets.
2. Shocks from electrical outlets
More than 2,500 fires are start as a result of malfunctioning electrical outlets each year. They’re also responsible for more than 4,000 shocks and other injuries. You’re at higher risk of electrical fires and shocks when there are too many appliances plugged into an outlet, or water is near the outlet.
How to prevent it
To keep an electrical outlet shock from happening, be sure to:
- Dry your hands before plugging in appliances
- Plug in only one heat-producing appliance into an outlet at a time. This includes coffeepots, toasters and space heaters.
- If your bathroom and kitchen aren’t already equipped with GCFI outlets, which have a reset switch, it’s a good idea to upgrade them. These outlets will shut off automatically instead of creating an arc circuit. Upgrading or repairing electrical outlets should be handled by an electrician.
- You should also call an electrician if you see signs of fire or smoke damage on a circuit from a previous arc flash. These outlets are more likely to start a fire in the future and should be upgraded.
Some appliances are more likely to cause electrical fires than others. Lamps, space heaters and HVAC systems are all likely culprits. Since these appliances tend to put out heat, it’s easy for nearby items to catch on fire. Many people place papers, blankets and other flammable materials too close to space heaters and lights as well. However, there are some unlikely causes of appliance fires, including bathroom fans. They are often full of flammable dust or lint and frequently start house fires.
How to prevent it
Keep these tips in mind to prevent an appliance fire:
- Make sure books, papers and other flammable materials are kept away from lamps
- Move mattresses, bedding and upholstered chairs away from space heaters
- Replace incandescent light bulbs with CFL ones, which produce less heat
- Clean lint and dirt from bathroom fans regularly
- Check your air conditioner for clogged lines at least twice a year
The roof is one of the most important parts of your home, according to your insurance company. Once a roof is damaged, the rest of the home is more likely to sustain damage as well. That’s why keeping your roof in good shape is important.
As one of the largest parts of your home’s external structure, the roof is also affected by many elements, including hail, wind and fire. In fact, in 90 percent of wind-related insurance claims, there was a payout for roof-related damage.
Whether your insurance covers a claim related to your roof depends on the roof’s age, how well it’s been maintained and what caused the damage. Catastrophic accidents, or Acts of God, are usually covered by insurance companies. However, you may need a rider to cover damage from water or ice to your roof. The best way to figure out what type of damage is covered is to check your policy.
Ultimately, though, the best way to prevent a claim is to keep your roof in good repair and fix leaks as soon as you notice them. Here in New York, many homeowners see even small leaks in the roof damaging the inside of their homes or causing mold to grow.
How to prevent roof damage
To prevent damage to your roof, ensure you:
- Remove dead branches or diseased trees that could fall on your roof
- Have your roof inspected for signs of leaks or damage
- Clean your gutters at least once a year
- If your roof has shingles, replace any damaged shingles quickly. This will prevent further damage to the roof and keep water from leaking into the house.
- Make sure your roof is well insulated. This will help to prevent ice dams from forming during the winter. These ice dams are a major source of water damage for many homes in the Northeast.
Prevent Home Insurance Claims With Maintenance
There’s a pattern to the most common home insurance claims. Almost all of them could be avoided with regular maintenance. Even those that can’t be prevented, though, like roof damage from wind or trees, can be lessened with regular maintenance.
If you’re like most homeowners, however, regularly inspecting and maintaining a house is hard. It’s time consuming, and it takes experience to know what you’re looking for. Systems that are out of sight, like plumbing and electricity, are particularly hard for most homeowners to maintain.
That’s why Mr. Rooter offers a free plumbing checkup. We’ll help you figure out what needs maintenance and how to stay on top of small repairs before they turn into expensive insurance claims.