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5 Common Home and Auto Insurance Claim Surprises (and How to Avoid Them)

Personal Insurance
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When disaster strikes, the last thing you need is an unwelcome surprise during the insurance claims process. From overlooked exclusions to unexpected delays, these challenges can make an already stressful situation worse. At Abbott Insurance, we’ve seen it all. Our agents bring firsthand claims experience to help you avoid these pitfalls and navigate claims with confidence.

1. What’s Covered… and What’s Not

One of the most frustrating surprises is learning that your policy doesn’t cover certain damages.

  • Homeowners: Damage from floods, earthquakes, or mold requires separate policies.
  • Auto: A standard liability policy won’t cover repairs to your vehicle if you’re at fault.
Real-Life Example:
After heavy rains, John’s basement flooded, causing $15,000 in damage. He was devastated to learn his homeowners insurance didn’t include flood coverage.

How to Avoid It:

  • Review your policy’s exclusions.
  • If you’re in a high-risk area, consider adding flood insurance.
  • Schedule a policy review to discuss your risks.

2. Even Unpaid Claims Can Affect Your Insurance History

It’s important to understand that even if your claim doesn’t result in a payout, it still becomes part of your claim history.

  • Homeowners: Reporting a small water leak or cracked siding might not lead to a payment but will still appear on your record.
  • Auto: Filing a claim for a minor fender bender, even if repairs don’t exceed your deductible, will still count as a claim.
Real-Life Example:
After a hailstorm, Sarah noticed a few dents on her roof. She filed a claim, but the damages were below her deductible, so her insurance company didn’t pay out. Later, when shopping for new insurance, she was surprised to learn the claim was listed on her record, making her appear riskier to other insurers.

How to Avoid It:

  • Carefully evaluate whether it’s worth filing a claim, especially for minor damages.
  • Consult with your agent to discuss potential impacts before filing.
  • Understand your deductible and weigh the long-term effects of a claim on your premiums and insurability.

3. Wear and Tear is Not Covered

Insurance doesn’t cover damage caused by normal wear and tear or lack of maintenance.

Real-Life Example:
A homeowner’s roof leaked due to old shingles. The claim was denied because the damage resulted from neglect, not an unexpected event.

How to Avoid It:

  • Perform regular maintenance on your home and vehicles.
  • Save receipts for repairs as proof of upkeep.

4. The Hidden Expense of Rental Cars After an Accident

A liability-only policy doesn’t extend coverage to rental vehicles for physical damage.

Real-Life Example:
Sarah was hit by another driver who was at fault, and their insurance provided her with a rental car while her vehicle was being repaired. However, since Sarah’s own policy only included liability coverage, it didn’t cover physical damage to the rental car. As a result, she had to pay for additional coverage from the rental company out of pocket, which added unexpected costs to an already stressful situation.

How to Avoid It:

  • Consider adding comprehensive and collision coverage to your policy if you want protection for rental vehicles.
  • Discuss your policy with your agent to ensure you’re prepared for situations like these.

5. Special Deductibles for Certain Claims

Did you know some policies have higher deductibles for specific events like hail or windstorms? These event-specific deductibles, often a percentage of your home’s insured value rather than a fixed amount, can result in unexpected out-of-pocket costs.

Real-Life Example:
After a severe windstorm, Lisa discovered her roof needed $25,000 in repairs. She assumed her standard $1,000 deductible would apply, but her policy had a 2% windstorm deductible. Since her home was insured for $300,000, her deductible was $6,000—leaving her scrambling to cover the unexpected cost.

How to Avoid It:

  • Review your deductible terms carefully.
  • Maintain a dedicated savings account for emergencies.

Additional Resources

If you’re looking for more information on how to prepare for claims, try these out.

How Abbott Insurance Can Help

At Abbott Insurance, we take the guesswork out of insurance. Our agents have firsthand claims experience, so we understand the challenges policyholders face. Here’s how we can help:

  • Customize your policies to match your unique risks.
  • Explain coverage details in plain language, so you’re never caught off guard.
  • Provide guidance before and during the claims process.

Don’t let unexpected claims surprises leave you scrambling. Contact Abbott Insurance today to review your current policies or get a tailored quote. With our experienced agents by your side, you can rest assured that you’re fully protected.