He huffed and he puffed, and he blew the house down. He almost did anyway. He definitely blew some shingles off, he blew a substantial number of trees down, and he got some fences pretty good as well. This big, bad wolf was the cause of considerable damage along the Wasatch Front. Frankly, the biggest problem with this particular gray beast happened to be his diet. Whatever he had for dinner Monday night gave this furry pest some serious hot air. Somebody offer this rabid, merciless, solitary dog a prescription strength antacid.
Alas, however, the damage has been done. The wake of the great mad wolf lies before us. Trees that have stood for hundreds of years have fallen, taking entire power lines with them as well as the electricity those lines provided for thousands. Cars were smashed, roofs have caved in, and trampolines and lawn furniture have been strewn about in pieces throughout the town. The missing sheep, however, ended up in my neighbor’s yard and can be re-commandeered at any time.
Two days later, the indomitable animal has clearly digested a couple of Gas-X and is no longer polluting us with his deviant huffs and puffs. The cleanup has begun. Where to start? How does one replace a 100-year-old tree, or 15-20 of them for that matter? Is this something to claim on your homeowner’s insurance? It all depends.
Some insurance policies have written exclusions. If wind damage is one of them, that is unfortunate in this event. However, even if it is not excluded, it is not always in the best interest of the homeowner to file a claim for damage.
Recommendations for when to file a claim vary depending on a number of factors. If, for example, you have a deductible of $1,000 and the damage is $2,500, it may not be the wisest advice to file a claim. Often, filing a claim with your insurance policy can result in a premium increase. Since the average amount of time a homeowner will file a claim is once every 10 years, if your premium increases $500 a year due to a filed claim, in three years you have paid the equivalent of what it would have cost to pay for the damage out of pocket; except now you have to continue paying the higher premium.
There are other risks of filing as well. There is an insurance database that goes by the acronym CLUE, as in catch one and don’t file a claim. This is the Comprehensive Loss Underwriting Exchange, i.e. your permanent insurance record. This means your claim follows you and it could even follow your property. You can run, but you can’t hide from these people. Switching to a new carrier? The claim follows you, much like your driving record — or shall we say, my driving record. It is not a pleasant sight.
Not only does the claim follow you, if you go to sell the home, the claim could also stick with the home. This same database has all the clues: the names of the filers, as well as the addresses in which the claim was made. Filing multiple claims or even one large claim can put a homeowner at risk for nonrenewal. Some companies won’t even write a policy for a new client on a home that has been marked as having had a claim filed.
Who is really the big bad wolf here? Having insurance on your home, one of the largest purchases you make in a lifetime, is primarily mandatory. However, what do you pay for if you can’t use it? Well, much like my self-employed “health insurance” policy, it is disaster insurance. It is in place to protect the homeowner from the potential of financial ruin. You weigh the risks to the benefits and figure out the equation. Sometimes, it is quantum math. Meantime, keep an eye out for a foamy mouthed, wild dog with bacon on his breath.