Damage at the house: when to file a home insurance claim and when to pay it yourself

A simple rule to start with

File when the damage is clearly larger than your deductible, when someone was hurt or someone else's property was damaged, or when the problem is still spreading. Consider paying yourself when the repair is small and close to the deductible, especially if it is not weather-related and you have filed recently, because claims stay on your record and can affect your renewal. When you are unsure, talk to your agent before you call the carrier, so you can think it through with someone on your side.

At The Phoenix Insurance, this is one of the most common calls we get: a homeowner standing in front of a stained ceiling, a cracked window or a broken fence, wondering whether to file. There is rarely a single right answer, but there is always a sensible way to decide, and it starts with a few numbers you can find in ten minutes.

Do the deductible math first

Your deductible is the part of any covered loss you pay yourself. Pull up your declarations page and find it. Many Texas policies have more than one: a standard deductible for most losses and a separate wind and hail deductible, often written as a percentage of the dwelling coverage. Convert that percentage into dollars before you do anything else. I walk through that conversion in what to do when your homeowners renewal jumps.

Then get a realistic repair estimate. If the estimate is below or barely above the deductible, a claim will pay little or nothing, and you will still have a claim on your record. If the estimate is several times the deductible, the policy is doing exactly what you bought it for. The gray zone is in between, and that is where your claim history and the type of damage decide it.

In that gray zone, I ask clients three questions. Could you pay this repair without straining your budget? Is this the kind of damage that could turn out bigger once a contractor opens a wall or climbs on the roof? And have you filed anything in the last few years? If the answers are yes, no and yes, paying yourself is often the smarter long-term choice. If the damage could grow, or if you would struggle to cover it, the policy is there for a reason, and you should not talk yourself out of using it.

How claims follow you in Texas

The Texas Department of Insurance explains that most companies use the Comprehensive Loss Underwriting Exchange, known as CLUE, to learn a home's claims history. CLUE reports show the claims history of people and houses, regardless of who owned them, for the last seven years. The department also notes that companies can report information to CLUE only if you filed a claim, and that you can get a free copy of your report each year and challenge wrong information.

The department's home insurance guide also lays out the renewal rules. A company can raise your rates if you file two or more nonweather-related claims. If you file two nonweather-related claims, the company must tell you that you are in danger of nonrenewal, and three or more nonweather-related claims in three years can lead to nonrenewal. The first two appliance-related water damage claims do not count if you have fixed the damage and it has passed inspection by a qualified inspector. And a company may not refuse to renew your policy because you filed a claim for something your policy does not cover.

• Weather claims, such as hail and wind, are treated differently from nonweather claims under these renewal rules
• Small nonweather claims add up, so a minor one today can count against you when a larger one comes
• A claim stays visible to future insurers through CLUE even after you sell the house

When filing is almost always the right call

Some situations are too big, too uncertain or too risky to handle on your own. In these cases, report promptly and let the policy work. Waiting can make the damage worse and can create a problem with the claim itself.

Water is the one people misjudge most. A small stain can hide a much larger problem inside the walls or under the floor, and the cost of drying, mold prevention and rebuilding grows by the day. If you have standing water, read the first 48 hours after finding water in the house and get a restoration company out quickly.

• Anyone was injured on your property, or you damaged someone else's property
• Roof damage after a hailstorm or high winds
• Fire or smoke damage of any size
• Water damage that is spreading or that you cannot trace
• Theft or break-in, which also needs a police report
• Any damage that makes part of the house unlivable

Protect the house and document it before you decide

Whatever you decide, the first steps are the same. The Texas Department of Insurance advises telling your company as soon as possible, making only temporary repairs to protect your house and belongings, such as boarding a broken window or tarping a roof, and taking pictures or video of the damage before any repairs. It also warns that the company might deny a claim if you make permanent repairs before it sees the damage.

Keep receipts for anything you buy to protect the house, make a list of damaged belongings, and save any estimates. If you end up paying for the repair yourself, you have lost nothing by documenting it. If you end up filing, you have exactly what the adjuster will ask for. A few minutes with your phone camera, walking room by room and narrating what you see, is often the most valuable thing you do all day.

Why I suggest calling your agent before the carrier

Once you report a loss to the carrier, the process has started. Talking it through with your agent first gives you a chance to look at the policy language, the deductible and your history with someone whose job is to help you, not to settle the claim. A good agent can tell you whether the damage is likely covered at all, which deductible applies, and whether the numbers make sense.

At our agency we work directly with the carrier when a client files, toward a quick and fair resolution, and we handle policy adjustments along the way. Claims themselves are filed and tracked with the carrier, often through the carrier's own website, but you do not have to navigate that alone. Do not let this conversation delay reporting serious damage, though; for anything urgent, report to the carrier right away and call us at the same time.

What happens after you file in Texas

The Texas Department of Insurance sets deadlines for the company. It must tell you it received your claim within 15 days, and accept or deny it within 15 business days after receiving all the information it needs, with exceptions that allow more time in some cases. Once it agrees to pay, it must send payment within five business days. The department also notes that some policies have a one-year deadline for filing unless you can show good cause for the delay.

An adjuster will usually inspect the damage. It is a good idea to have your contractor there, according to the same guide, so estimates can be discussed directly. If you have a mortgage, repair checks are typically made out to both you and your lender. For roofs specifically, the hail damage and roof claim walkthrough from a Dallas roofer explains what to expect on the roof side.

Mistakes that make a fair claim harder

Most claim problems come from a handful of avoidable errors. I see them often enough that I mention them to every new client long before they need to file anything.

The other mistake is the opposite one: being so worried about your record that you never use the policy you pay for. Insurance exists for the losses you cannot comfortably absorb. If the house took real damage, file, document it well, and let your agent help you through it. The goal is not to avoid claims at all costs but to save them for the losses that matter.

• Making permanent repairs before the adjuster sees the damage
• Waiting weeks to report damage that kept getting worse
• Throwing away damaged items before they are photographed and listed
• Filing small nonweather claims that cost more in future premium than they pay
• Signing over claim rights or payments to a contractor without reading the paperwork
• Assuming the deductible is a flat amount when it is a percentage of dwelling coverage

Talk it through with us

If you are a client, call us before or as you report, and we will look at the policy with you, explain the deductible and coverage, and stay involved with the carrier. If you are not a client and are not sure your current policy is set up well, we can review it, including the deductibles and roof coverage terms that decide what a claim is worth.

Our office on LBJ Freeway in Dallas is open 8:30 AM to 5:30 PM, and we review every client's policy each year, which is usually when we catch the deductible or coverage settings that would have made a claim disappointing. I go through those settings in the yearly insurance review checklist.

Questions people ask me