When you sit down with your insurance agent to customize your Homeowners insurance policy, it may be helpful to know what’s most likely to go wrong that could result in a Homeowners claim. So I thought I’d pass along this actual claim data, which average nationwide losses over five recent years.
Wind and Hail 34.8%
Storm damage accounts for over a third of all Homeowners claims in an average year. Of course, this can vary considerably depending on weather patterns. During the five years of this data, it ranged from 20% of all claims filed in 2015 to 49% of losses in 2012.
Water Damage and Freezing 28.9%
What is most likely to happen to your home when there’s no storm activity? Probably a pipe breaking or water line leaking or appliance malfunctioning that results in water damage in your house. It’s easy to forget how many water lines we have running throughout our homes, and one small leak can lead to thousands of dollars in cost to clean up and repair the resulting damage. This category also includes damage and cleanup costs from a backup of sewers or drains (an optional coverage on most policies). In years when it’s not storming, this category accounts for the lion’s share of claims; for example, in 2015 (a year in which only one out of every five claims were storm related), 45% of all claims were for water damage and freezing.
Fire and Lightening 23.5%
While fire coverage is probably the main thing people think of when insuring their home, less than one quarter of all claims fall in this category, which also includes lightening claims. In my experience, lightening related electric surge claims are far more frequent than fire claims. If I had to guess, I’d say probably only one out of every ten “fire and lightening” claims result in the fire department having to put out a fire. Of course, when that does occur, there is going to be a lot of damage, from smoke and water if nothing else.
All Other Property Damage 6.7%
There’s a lot of other things that could go wrong that could lead to damage to your home, personal property or outbuildings. This category includes vandalism, frozen food spoilage, damage caused by vehicles and a number of other less likely (but possible) perils.
Liability and Medical Payments 3.6%
This category covers any time your policy pays money out to a third party on your behalf. For example, a guest is hurt on your premises, your dog bites someone or you are trying to cut down a tree and it falls the wrong way onto your neighbor’s shed.
Good news! The odds of someone breaking into your home and stealing your possessions are actually rather low, compared to other things that could go wrong at your home. This category also includes a thief breaking into your car and stealing stuff inside or maybe taking items from an unlocked garage.
Chances are you won’t have to file a Homeowners claim due to any of these things happening any time soon, but having a well-rounded Homeowners policy provides great peace of mind just in case something does go wrong.
Claim data is per Insurance Services Office (ISO), as reported in the June 2017 issue of National Underwriter.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.