This might sound strange to you if you have spent the money on putting an insurance policy in place, but there are times when you should consider not making a claim. It really can protect you from greater losses if your premium rates suddenly rocket up or, worse, the insurance company decides it would prefer you to take your business elsewhere. So let’s take it one step at a time. Almost every policy imposes a duty on homeowners to make claims either within a set time or a “reasonable” time.

If you miss out on a time limit, you have no right to claim. When is a claim made on a “timely” basis? You will be expected to notify the insurer of a theft or vandalism within days. Reports of serious damage will be expected within two weeks and certainly never longer than 30 days. This can put you under pressure if the policy requires you to get estimates from local contractors, but no-one ever said a policy was going to be worded in your favor. So, if you have reliable estimates of the amount lost and/or costs of repair, now comes the big decision.

As a general rule, you should only make claims if the amount is greater than the deductible. If you are going to pay out of your own pocket in any event, silence will benefit you in most cases. However, be careful if there is a third party liability element involved. Suppose the wind lifts two or three roof tiles and one blows down into the street, hitting someone on the sidewalk. The cost of repairing the roof may be small but the risk of a major claim for personal injuries cannot be ignored. Always make a claim when you cannot put numbers on a possible third party claim. Now comes the difficult part. Every time you make a claim, it’s recorded in a national database called the Comprehensive Loss Underwriting Exchange.

If you make multiple smaller claims, or one or two large claims, this will stay in CLUE for seven years and may deter other insurers from writing a policy for you or encourage them only to quote high premiums. You should therefore consider absorbing losses up to $3,000. You may be lucky – the insurer pays your claim in full and does not raise the premiums. But suppose you have a deductible of $1,000 and the insurer raises your premium for $500 for the next two years. You never know the real costs of the claim until after the event but setting a higher minimum amount for a claim gives you a margin of safety. You should at least break even on the smaller claims.

Dealing with claims shows the homeowners insurance companies at their best or worst. The best pay and do not try to recover their losses by increasing your premium. The worst immediately deny your claim and fight you on technicalities. Never forget every state has a Department of Insurance to deal with complaints against insurance companies. If you think your company is unreasonably denying your claim, make a complaint. There are also attorneys who specialize in insurance matters and, if the claim is for a big amount, it may be worth getting formal legal advice on your rights. Homeowners insurance is not “cheap” and you are entitled to fight to recover the costs of repairing or replacing your home so long as the damage falls within the defined perils.