Every year approximately 6% of American homeowners file some sort of claim. Many are for property damage from perils like wind, fire, and flood. But homeowners also file claims for their personal liability. Knowing which types are the most common home insurance claims can help you protect against them.
According to the Insurance Information Institute (III) latest annual study into the causes of home insurance losses , almost 98% of home insurance claims are for property damage. Liability claims, though far less frequent, are considerably more expensive when they occur.
1. Wind & hail (45.5% of claims)
This category encompasses destruction caused by hurricanes, tornadoes, and the wind associated with thunderstorms, so it’s no wonder it comes in first for frequency. Think about it: When major wind events roll into town, they often do a lot of damage – enough that repairs are greater than an insurance deductible, so it makes sense to make a claim on a policy.
But while wind and hail account for more than a third of all homeowners insurance claims, they’re actually not the most expensive. The average is only $11,695 per claim on average, making them number four overall in terms of cost. Read on and you’ll see that this makes wind and hail about a fifth as expensive as fire damage (shudder).
2. Fire and lightning damage (23.8% of claims)
While fire and lightning claims rank third for frequency and second for percent of losses incurred, they tend to be the most expensive claims, with a whopping average price tag of $77,340. The good news? Homeowners insurance was originally designed to protect against fires, so coverage for fire claims is easy to find.
The bad news, obviously, is that fires can destroy a lot of property fast (hence the high cost of claims).
3. Water Damage & Freezing (19.9% of Claims)
When pipes freeze and burst or appliances leak, serious damage can result. And it happens fairly often: More than one in five homeowners insurance claims relate to this type of water damage.
In addition to being common, these claims are somewhat expensive, ranking third overall and coming in at about $11,650 on average.
4. All other property damage (7.9% of claims)
Miscellaneous property damage can take a million forms: a tree falling through your roof, a baseball shattering your window, a trash truck backing into your brand-new garage. Because of the sheer variety here, the average cost of these types of claims isn’t too informative. But for the record, it’s $6,773.
5. Bodily injury or property damage to others (2% of claims)
Let’s all be glad liability claims are rare because they tend to be really expensive. As a refresher, liability refers to your duty toward other people. So when a guest is injured or has their property damaged while visiting your home, you may be liable for their medical costs or the costs to repair or replace their property.
Liability claims rank second in average cost, coming in at $30,324. The good news? Most homeowners insurance policies offer liability protection.
6. Theft (0.6% of claims)
The sixth most common homeowners insurance claim is theft. Coming in at just under one percent of all claims with an average claim cost of $4,415, theft is the smallest of the big guys, you could say.
If you’d like to reduce your risk of theft even further, consider installing a home security system. Some insurers even offer premium discounts for doing this!
7. Medical payments and other causes (0.3%)
Rounding out the list of top home insurance claims is payments for medical care for property-related injuries. While 0.3% may seem insignificant in terms of percentage of claims, the average loss for these types of claims is $7,147 – the fifth most expensive type of claim according to the III’s study.
Mitigate Your Risk to Save Your Home & Your Money
Homeowners don’t want bad things to happen to their houses because they’re expensive, sad, and a pain to deal with. Insurance companies also don’t want bad things to happen because bad things cost them money.
That’s why a lot of insurance carriers offer lower premiums for homeowners who mitigate their risk. Risk mitigation might involve:
- Having a smoke alarm with working batteries.
- Having a fire extinguisher.
- Living near a fire department.
- Having a home security system.
- Having a carbon monoxide detector.
- Maintaining your plumbing and sprinkler systems.
One important note: While safety and security updates are almost always wise, they don’t all lead to an insurance discount. If you’re considering higher-end upgrades with an eye on premium savings, check with your insurer first.
How Much Coverage Do I Need?
Understanding the types of risks you’re vulnerable to can help you figure out your home insurance. The likelihood of those risks plus other factors, such as your home’s location, features, and value, all play a part in the amount of coverage you need. With more than 10 million Americans having to file some sort of home insurance claim each year, it’s important to be as protected as possible.
Editor’s note: This article was originally published in December 2017. It has been updated for accuracy and comprehensiveness.
