Almost 98% of home insurance claims are for property damage, according to the Insurance Information Institute (III) annual study into the causes of home insurance losses. That said, liability claims, though far less frequent, are considerably more expensive when they do occur.
Every year nearly 6% of American homeowners file some sort of insurance claim. While knowing which home insurance claims are the most common can’t stop damage from happening, it can help you protect against it.
1. Wind & hail (40.7%)
This category encompasses destruction caused by hurricanes, tornadoes, hail, and the wind associated with thunderstorms, so it’s no wonder it comes in first for frequency. Think about it: when major wind events roll into town, they often do a lot of damage – enough that repairs are greater than an insurance deductible.
But while wind and hail account for more than a third of all homeowners insurance claims, they’re actually not the most expensive. The average is only $13,511 per claim, making them third most expensive for property claims and the fourth overall.
2. Fire and lightning damage (21.9%)
While fire and lightning claims rank fourth for frequency and third for percent of losses incurred, they tend to be the most expensive claims. The average price tag? A whopping $83,991.
The good news is that homeowners insurance was originally designed to protect against fires, so coverage for fire claims is typically easy to find.
The bad news, obviously, is that fires can destroy a lot of property fast (hence the high cost of claims).
3. Water damage & freezing (27.6%)
When pipes freeze and burst or appliances leak, serious damage can result. About one in 60 insured homes has a property damage claim caused by water damage or freezing each year.
In addition to being common, these claims can be expensive. They rank second for most expensive property claims and third overall, coming in at an average of $13,945 per claim.
4. All other property damage (6.9%)
Miscellaneous property damage can take a million forms: a tree falling through your roof, a baseball shattering your window, a trash truck backing into your brand-new garage. Because of the sheer variety here, the average cost of these types of claims isn’t too informative. But for the record, it’s $7,798.
5. Bodily injury or property damage to others (1.6%)
Let’s all be glad liability claims are rare because they tend to be really expensive. As a refresher, liability refers to your duty toward other people. So when a guest is injured or has their property damaged while visiting your home, you may be liable for their medical costs or the costs to repair or replace their property.
Bodily injury and property damage claims are very expensive: $31,690. The good news? Most homeowners insurance policies offer liability protection.
6. Theft (0.7%)
Coming in at just under 1% of claims, theft is the sixth most common homeowners insurance claim. The average cost? $5,024, making theft the seventh most expensive.
If you’d like to reduce your risk of theft even further, consider installing a home security system. Some insurers even offer premium discounts for doing this!
7. Medical payments and other causes (0.5%)
Rounding out the list of top home insurance claims is payments for medical care for property-related injuries. While 0.5% of all claims filed may seem insignificant, the average loss for these types of claims is $13,081 – the fifth most expensive type of claim according to the III’s study.
What is the most common damage to your home that insurance does not cover?
It’s a mistake to think that homeowners insurance covers your investment under any and all circumstances. Home insurance is, after all, designed to provide financial protection in the event of sudden, accidental, and unpredictable damage to a home.
So what is the most common damage to your home that insurance does not cover?
The answer is wear and tear or lack of maintenance. When you buy a home and insure it, you’re obligated to properly maintain the property to keep it safe and comfortable and to help protect its value.
Examples of poor maintenance and wear and tear
There are plenty of examples of wear and tear or a lack of maintenance that may lead to a claim being denied.
Damage from a leaky roof
While a leak from damage to your roof may be covered by homeowners insurance, a slow leak resulting from negligence and causing extensive damage may not. It is up to you to maintain your roof and address any small leaks immediately.
Rotting fencing or siding
If you have wood siding or a wood fence, you need to periodically inspect it for wear and keep it in good shape. Even if a fence is damaged by high winds, coverage may be limited if it is found that the fence was rotting or in otherwise poor condition.
Infestations
Infestations and the damage they cause may be considered a maintenance issue, which can mean they aren’t covered by homeowners insurance. This can include infestations by wasps, bees, termites, rats, squirrels, ants, roaches, and other pests. Homeowners should keep homes pest-free and limit access to unwanted visitors. Many pest protection companies offer their own form of coverage for pests in the form of warranties or service contracts.
Garage doors
Garage doors are the largest moving part of most homes. They can also be some of the most neglected. Be sure to regularly check your garage doors and keep them maintained to the manufacturers' specifications. If they fail due to an accident or storm damage, they’re likely covered. But that’s less likely if the doors weren’t kept in good condition.
When there is a failure due to normal wear and tear or due to a lack of proper maintenance, homeowners insurance does not cover the cost of repair or replacement. You can find the details in your policy, including under the wear and tear exclusion.
Mitigate your risk to save your home & your money
Homeowners don’t want bad things to happen to their houses because damage is expensive and a pain to deal with. Insurance companies also don’t want bad things to happen because those bad things cost them money.
That’s why a lot of insurance carriers offer lower premiums for homeowners who mitigate their risk. Risk mitigation might involve:
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Having a smoke alarm with working batteries.
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Having a fire extinguisher.
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Living near a fire department.
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Having a home security system.
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Having a carbon monoxide detector.
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Maintaining your plumbing and sprinkler systems.
One important note: While safety and security updates are almost always wise, they don’t all lead to an insurance discount. If you’re considering higher-end upgrades with an eye on premium savings, check with your insurer first.
How much coverage do I need?
Understanding the types of risks you’re vulnerable to can help you figure out how much home insurance you need. You want to take a look at the likelihood of those risks occurring, plus other factors, such as your home’s:
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Location.
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Features.
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Value.
All play a part in determining the amount of coverage that’s right for you. With more than 10 million Americans having to file some sort of home insurance claim each year, it’s important to be as protected as possible.
