\n<\/p>\n
We\u2019ve seen a trend the last few years of customers turning in homeowners insurance claims anytime something goes wrong with their house. I think the reason for this is that people often mistake homeowners insurance for a warranty. Unfortunately, the two couldn\u2019t be more different. The problem with turning in a claim for every little thing is that not all losses are covered by homeowners insurance and too many claims will often result in a bad outcome for the customer. I\u2019ll start first with noting the difference between a warranty and homeowners insurance, then conclude with the possible consequences of turning in too many homeowners insurance claims. <\/p>\n
In the strictest sense, a warranty is a written statement that promises the good condition of a product and states that the maker is responsible for repairing or replacing the product usually for a certain period of time after its purchase (Brittanica dictionary<\/a>).<\/p>\n Warranties are common for most purchased goods such as appliances, furniture and vehicles. For example, you buy a refrigerator and it comes with a 5 year warranty. The ice maker fails in the first year. The manufacturer would replace the ice maker.<\/p>\n Homeowners insurance, however, does not work this way. Should something in your house fail, there is no guarantee it will be fixed. Why? Because insurance policies specifically state what kind of losses are covered, usually by saying what is not (called exclusions). For example, flood is a standard exclusion, so if there\u2019s a horrible rainstorm where 3 feet of water fills the first floor of your house, the homeowners policy will not pay to fix the damage. Nor will it pay to temporarily relocate you. Basically it won\u2019t pay for anything related to the flood damage. <\/p>\n So, it appears that the main difference between a warranty and homeowners insurance is the word guarantee. A warranty is a guarantee and homeowners insurance is not. <\/p>\n (Need an explanation or refresher of the homeowners insurance claim process? Read our post<\/a>). Insurance companies can do one of many things should the number of claims be more than they\u2019re willing to tolerate:<\/p>\n We\u2019ve also written a post describing when NOT to file a homeowners insurance claim. You can read it here<\/a>. And keep in mind, it\u2019s often a really good idea to contact your agent to discuss a possible claim before submitting it (of course barring an emergency). We can offer advice and guidance (as well as discuss possible consequences) to help you make the most informed decision. <\/p>\nHow is homeowners insurance different than a warranty?<\/h2>\n
What can happen to my homeowners insurance if I turn in too many claims?<\/h2>\n
\n
Need help understanding your homeowners insurance? Fill out the form below and we\u2019re happy to review your current coverage and see how we can help!<\/h3>\n<\/p><\/div>\n