When you pay your monthly home insurance premium, you may not spend a lot of time thinking about what you are actually covering with that payment. Home insurance covers quite a diverse amount of situations, but what are the most common claims? According to the Insurance Information Institute, these are the events that trigger most homeowners’ insurance claims.
Wind Damage (34% of Claims)
This category includes destruction caused by our annual hurricanes, as well as tornados and wind associated with thunderstorms. Given the severity of our summer storms, it’s no surprise that this is the largest category of claims. This damage is typically covered by the windstorm portion of a homeowners policy. Significant wind events often do a lot of damage to homes and property, and if the necessary repairs exceed the deductible, claims are made. But while wind and hail make up a third of all homeowners insurance claims, they tend not to be very expensive (relatively speaking). These types of claims average $10,801 per incident, making them only the fourth worst situation financially.
Water Damage (29% of Claims)
You may think of floods from storms when you hear water damage, but this category includes incidents like pipe bursts or leaking appliances. These seemingly minor situations can actually cause significant damage. It is also one of the most commonly occurring homeowners’ claims, as 20% of homeowners have experienced these occurrences. In addition to representing a good portion of total claims, water damage can be expensive – approximately $11,098 on average. Flood damage is not a part of this category because flood insurance is a separate entity and covers floods from external utilities and weather events.
Fire and Lightning Damage (25% of Claims)
While fire and lightning strikes come in third as far as frequency, they cause the most damage. Lightning strikes are prevalent here in Florida, and many claims are from this state. Because of how destructive house fire can be, the average price tag for remediation is a stunning $78,838. Virtually every homeowner’s policy covers fire damage, which is good news.
Miscellaneous Property Damage (7% of claims)
Miscellaneous property damage can look a million different ways – a broken window, a tree falling on the roof, or your lawn guy driving his riding mower through your sliding glass door. There is no real way to estimate the average cost of these situations because they are so diverse.
Liability Claims (3% of claims)
Liability claims are uncommon but expensive. With an average cost coming in just under $30,000, liability claims refer to situations when a guest is injured or has their property damaged while visiting your home.
How to Save Your Home & Your Money
Even with insurance, homeowners don’t want anything to happen to their property. Insurance companies also don’t want claims because it costs them money. Because they want to avoid claims as much as you do, many insurance carriers offer reduced premiums for homeowners who take measures to reduce their risk. These proactive measures may include:
- Installing an adequate number of smoke alarms with working batteries.
- Having ready access to fire extinguishers in vulnerable areas.
- Owning a residence in close proximity to a fire department.
- Installing a home security system.
- Installing carbon monoxide detectors.
- Replacing an older roof.
- Maintaining plumbing and sprinkler systems.
It is important to note that not every security upgrade to your home will result in an insurance discount. If you want to make some changes to save on your insurance premium, ask your insurance provider for a list of available discounts and programs.
Anderson & Associates Insurance Group of Palmetto, Florida, provides professional insurance brokerage services.
