When a tree falls in the woods, does the insurance company punish you?

April 24, 2007 6:48 AM

At what dollar amount do I draw the line for making a homeowners insurance claim?

We had a very large tree fall last week. It caused some damage to the house and the tree had to be cut up and dealt with. All in all it'll come in around two grand for repairs, should I claim it on my insurance?

So far the answers/anecdotes I've heard from people are all over the place. Some say it's not worth it to claim anything below ten grand. Others say claim if it's above your deductible (as low as $250!). I've heard of the "three strikes" rule and about the national databases that count even queries against you. It all sounds like a nightmare.

I want to be able to draw some sort of line. Should I claim if it's above a thousand? Five thousand? Ten thousand? Personal anecdotes, especially if they deal with life post-similar-sized claim, are welcome.

If it matters: I live in North Carolina and can pay cash for the repairs (though dropping two grand is wince-worthy).

posted by 10ch to work & money (13 answers total)

Two grand? That is why you have insurance. I would report that. Also, it's not like you caused this accident so it won't eliminate your safe driving discount etc.
posted by caddis at 6:53 AM on April 24, 2007

2004 MA experience: $2500 storm damage claim, coverage dropped 6 months later for an "unknown breed" dog. So I would only make the claim if I absolutely couldn't afford it or I had all of my bases covered.
posted by kuujjuarapik at 7:10 AM on April 24, 2007

I'd probably claim this; it's related to a known, severe storm, though I don't know if that's factored in. Call your insurance agent and ask; they may have useful info. Since you're reluctant to make less than huge claims, a higher deductible would save you money on premiums.
posted by theora55 at 7:14 AM on April 24, 2007

I had a tree fall on my house a few years ago- about $1000 in damage, but $2000 or so to get a crane to remove the rather large hickory tree from my roof. My insurer (Merastar, a subsidiary of Prudential) paid promptly with no repercussions. It must be said, though, that I get my homeowner's insurance as part of my benefits through work, so I am part of a large group rather than a lone homeowner.
posted by TedW at 7:53 AM on April 24, 2007

Oh, I had previously filed a claim for a new roof due to hail damage, so it was not my first claim with them; they were both in about a 2 year period.
posted by TedW at 7:56 AM on April 24, 2007

I've been burned by 3 strikes on me with my rental properties. One big window on one place, one lost luggage claim, then later a hail damaged roof on another property.

Later, I was declined for insurance on another rental property I purchased due to my 3 claims in X years.

Since then, I would only make a claim if I can't afford it, and I cranked up my deductable as high as they'd let me. It sounds like you can afford it so I wouldn't claim it if it was me.
posted by thilmony at 8:27 AM on April 24, 2007

In my family, we all seem to agree that you should only make a claim under 'disasterous' conditions, like a tree falling on the house, or a fire, or something along those lines. Broken windows, dishwashers flooding the kitchen floor, and burns in the carpet don't count.

We put the general minimum at somewhere around $15,000.

Also - my dad was an insurance claims adjuster at a large company (like a good neighbor) for 30+ years.
posted by matty at 9:52 AM on April 24, 2007

Burns me up that you can't use the insurance you pay for for fear of being dropped. In another world that would be the definition of a scam.
posted by Gungho at 12:40 PM on April 24, 2007

Have you spoken to your insurance agent? Talk to your agent and get some advice. Although I think this varies, just because an adjuster comes out to your house does not mean you get dinged for making a claim (although it might).

Ask your agent; it's their job to know these things.
posted by Doohickie at 6:31 PM on April 24, 2007

Thanks all, OP here.

Looks like we have a tie, three "pro-claim" and three "anti-claim." I think I'll probably not claim it.

Doohickie - I hesitate to even call about it. What I've heard is there's a national database where calls/claims are recorded to (originally) discourage fraud. But now it's used against regular folks, since everyone can see it. I don't know if that's true or not. Would be helpful if someone on the green was in the insurance industry.
posted by 10ch at 7:23 AM on April 25, 2007

10ch: There is actually something called a "C.L.U.E. Report" that shows all insurance claims. You can request a free copy of your own report via Choicetrust.
posted by dcjd at 11:19 AM on April 25, 2007

I've heard of such databases, too, but there is a difference between asking advice of your agent and filing a claim. Find out what the deductibles are and all that, maybe even ask them if they can name some contractors if you need one.

I did exactly this when we had a storm last year. They sent an adjuster out who inspected the roof and went over the aspects that needed to be repaired without filing a claim, then my agent gave me the names of two local contractors that are on their "approved" list. I got estimates from both. I asked for estimates for simple repair of the problem area plus a whole roof replacement and both contractors advised me that the roof was fine except for a few small areas.

I hired one of the contractors and they had the leak fixed in a few days for a very reasonable price.

Pesonally, if I didn't feel I could even discuss something like this with my agent, I would get a new agent.

In service industries like insurance, real estate, etc., you need to seek out people you can talk to, and hopefully trust. If you can't ask them questions and get straight answers, you've got the wrong agent.
posted by Doohickie at 1:41 PM on April 26, 2007

OP, here... I got some advice from an insurance claims adjuster and thought I'd post it here for anyone who finds this later...

The adjuster said that insurance companies are more concerned about how many claims a homeowner puts in, not how much the claim is for. If a major disaster like a hurricane or tornado passes through and many folks in the same area are affected, it's called a "category disaster" and the claim isn't really counted against any individual and rates wouldn't necessarily go up. More than one individual claim in a three year period will more than likely cause your rates to go up.
posted by 10ch at 7:08 AM on May 15, 2007