Link to the AIC May/June Newsletter
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How to Protect Against the Most Common Homeowners Insurance Claims
The homeowners insurance industry has evolved to meet the needs of modern families, but did you know, at one time, fire insurance was all that was available to Americans?
Established in 1752 by Benjamin Franklin and his fellow firefighters, the Philadelphia Contributionship for the Insuring of Houses from Loss by Fire was the first insurance company in America1. Houses at the time were mainly constructed of wood and often built in close proximity to one another, making it hazardous and costly if a structure burst into flames and spread to neighboring properties. The Contributionship helped protect against those losses. Buildings were inspected to determine if they were safe or not and then, at a monthly meeting, the board of directors would vote on whether or not a property should be insured. Houses built not conforming to legal specifications were denied insurance.
While fire is still one of the most common homeowners insurance claims, today's policies now help protect against a number of losses, including water leaks, windstorms, hail damage, theft and other unforeseen circumstances. Here are the most common types of homeowners insurance claims .
Water Claims due to water-related damages account for nearly half of homeowners claims, according to Insurance. Water damage is usually caused by bursting or leaking pipes, plumbing issues, malfunctioning household appliances such as refrigerators, hot water tanks, dishwashers, washing machines and HVAC issues.
Hail Hail forms when thunderstorms carry water droplets into the atmosphere above freezing levels. Once frozen, the droplets plummet to the ground, which causes billions of dollars in damages to homes' roofs and windows, vehicles and crops. Hail cost the insurance industry $8.4 billion and was responsible for 20 percent of claims in 2016, according to the 2017 Home Trends Report.
Fire The U.S. wildfire season was very active in 2017, leading to one of the year's billion-dollar disaster events. Additionally, the National Fire Protection Association reports nearly half a million structure fires occurred in 2016, resulting in $7.5 billion in property damage.
Theft The Insurance Information Institute reports theft affects one in 235 insured homes annually. Theft happens more frequently during times when people are less likely to be at home, like during summer months when many go on vacation, or during school or work hours.
Here are a few things you can do to reduce your home claims Risks:
Use social media wisely - disable geo-tagging features on your apps, resist the temptation to check in at events or restaurants and don't advertise vacation plans. While on vacation, refrain from posting photos until you return home.
Use light timers to give the appearance you're home even if you aren't. Temporarily stop mail and newspaper service if you plan to be out of town.
Don't overload wall outlets or use items with frayed electrical cords.
Keep flammable items, like curtains and furniture away from portable heaters and turn heaters off before going to sleep.
Don't leave lit candles unattended and keep them out of reach of children and pets. -Keep at least one fire extinguisher in your home. Make sure everyone knows how to properly use it and have it inspected once a year.
Invest in hail-resistant roofing materials.
Protect windows by closing storm shutters when severe thunderstorm warnings are issued.
Inspect pipes for cracks and leaks. If you find any, have them repaired or replaced immediately.
Check appliance hoses at least once a year and replace any that are cracked or have leaks.
Review the manuals for your appliances for maintenance tips to keep them in good working order.
Make sure showers, tubs and sinks are properly sealed and caulked.
Know the location of your main water shutoff valve so you can turn off your water supply in the event of a burst pipe or damaged hose.