We’ve all seen the comforting insurance commercials:
- “Like a good neighbor…”
- “You’re in good hands…”
These slogans suggest that your insurance company is always there to cover anything that goes wrong. But here’s what they don’t tell you—insurance isn’t designed for every little issue, and using it the wrong way can actually cost you more in the long run.
Let’s break down what insurance is really for, when you should and shouldn’t use it, and how to protect your home the smart way.
The Problem – Common Insurance Misconceptions
Many homeowners believe that because they’ve been paying premiums for years, they should be able to file claims for anything—from a small roof leak to a broken fence. But that’s not how home insurance works.
Home Insurance Is for Major, Unexpected Losses
Think of home insurance like car insurance. If you get into a major accident, your policy covers the damages. But you wouldn’t file a claim for new tires or an oil change, right?
The same logic applies to your home. Insurance is designed to protect against:
- ✔ Fires
- ✔ Storm damage
- ✔ Major structural issues
- ✔ Unexpected, catastrophic events
It is not meant to cover:
- ✖ Regular wear and tear
- ✖ Minor maintenance issues
- ✖ Gradual damage from neglect
The Cost of Filing Too Many Claims
When homeowners file too many small claims, two things happen:
- Premiums Increase: Insurance companies view frequent claim-filers as high-risk.
- Policy Cancellation Risk: If an insurer believes you rely too much on your policy, they may cancel your coverage altogether—making it harder and more expensive to find new insurance.
The Reality – How Insurance Actually Works
Every time you file a claim, it stays on your record. Even if it’s a small claim, insurers track your claims history and adjust your rates accordingly.
Example: How Small Claims Add Up
Let’s say in three years you file:
- A claim for a minor roof leak ($2,000)
- A claim for a plumbing issue ($1,500)
- A claim for wind damage to your fence ($1,000)
Individually, these seem reasonable. But together? You now look like a homeowner who depends on insurance for routine upkeep.
That’s when insurance companies start:
- Raising your premiums
- Labeling you as high-risk
- Potentially dropping your policy
Before filing a claim, ask yourself: Is this claim worth it in the long run? If the repair cost is close to your deductible, it’s often better to pay out of pocket and avoid adding another claim to your record.
A Smarter Approach – Taking Control of Home Expenses
So, what’s the better way to manage home repairs and keep your insurance costs low? It’s all about being strategic and proactive.
1. Maximize Your Deductible to Save on Premiums
One of the most effective strategies is to increase your deductible. By choosing a higher deductible, you can:
- 💰 Lower your annual premium
- 🚫 Avoid the temptation to file small claims
- 🛡️ Reduce the risk of policy non-renewal due to claim frequency
This approach not only saves you money each year—it also protects your insurability by keeping your claims history clean. If you’re only filing claims for major losses, your insurance company sees you as a lower risk, which can lead to better long-term rates and fewer coverage issues.
2. Have an Emergency Fund
Setting aside a cushion for small repairs means you won’t feel the pressure to file a claim every time something breaks.
3. Keep Up with Maintenance
Routine maintenance prevents minor issues from becoming major headaches. Take care of your home like you would your car—it pays off.
4. Be Strategic with Claims
If the repair cost is close to your deductible, it’s often better to pay out of pocket and preserve your clean record.
We’re Here to Help
At Vargas & Vargas Insurance, we understand that navigating insurance can be complex. Our goal is to provide you with the knowledge and support you need to make informed decisions about your coverage.
Have questions or need assistance with your policy? Give us a call at 617-298-0655. We’re here to help you protect what matters most.
