Here's Why I Don't Always Submit Claims for Covered Issues to My Homeowners Insurance Company

Homeowners insurance is an unavoidable expense when you own a home. And in the past, my homeowners policy has picked up the tab for a number of issues that otherwise would have cost me thousands of dollars.

Once, for example, some of the piping in my home came apart due to issues with the way it was installed, causing a big leak. Repair people had to come to my home, rip open our walls, reinstall the piping, and then fix the water damage that had ensued.

That situation was covered by my homeowners insurance because it wasn't a matter of wear and tear. When your air conditioning system goes out after 12 years, for example, that generally won't be covered by homeowners insurance because it's expected to happen, whereas the plumbing issue I ran into was certainly not a normal occurrence.

But there are times when I know I'm looking at an issue that's covered by my homeowners insurance policy, and yet I won't submit a claim. Here's why.

When the cost of the repair is less than my deductible

Homeowners insurance policies require you to pay a deductible on a per-claim basis. Liberty Mutual says the average homeowners insurance deductible is $1,000. Yours may be lower or higher, depending on your coverage.

What'll sometimes happen is that the cost of the repair I'm looking at is less than my deductible. So in that case, there's absolutely no point in filing a claim with my insurance company, since I'm going to be paying for the entire cost anyway.

When the cost of the repair is only slightly more than my deductible

In some cases, even if the cost of the repair I'm looking at exceeds my deductible, I'll cover the entire cost myself anyway. Why do I do this?

The more claims you file against your homeowners policy, the more likely your premium rates are to go up the following year. So if it's a small difference -- say, $50 to $100 -- I might just eat the cost myself, because if I don't, I'm going to end up paying that amount anyway in the form of higher premiums.

Now, I won't specifically not submit a claim to my insurance company if the repair is, say, $250 above my deductible. A single claim is unlikely to drive the cost of my homeowners policy up by that much from one year to the next. But for smaller discrepancies, I'll commonly just pay the whole bill myself.

And also, that way, I don't have to involve my insurance company, which means I don't have to wait for a claims adjuster to come out and assess the damage. Instead, I can just get whatever it is taken care of right away.

The whole purpose of having homeowners insurance is to be protected when major issues arise in your home. So you shouldn't be afraid to submit claims when the situation warrants it. But in these specific situations, it may not make sense to file a claim against your homeowners policy.