Accidents can happen in the most unexpected ways, like a car crashing into your home. If you ever find yourself in this unfortunate situation, you may wonder whether to file a claim with your homeowner’s insurance or the driver’s auto insurance. While it might seem logical to start with the auto insurance, relying on your homeowner’s insurance is often the better option.
Why Not File with the Driver’s Auto Insurance?
While it’s true that the driver’s auto insurance is responsible for the damage, relying on it as your primary source of coverage can leave you with less-than-ideal results:
- Depreciated Value Only
- Auto insurance policies typically pay the Actual Cash Value (ACV) of the damage, not the cost to repair or replace it.
- For example, if the damage costs $15,000 to fix, the auto insurer might only pay $8,000 after factoring in depreciation.
- No Additional Living Expense Coverage
- If your home becomes uninhabitable while repairs are made, auto insurance won’t cover temporary housing, meals, or other living expenses.
- Delayed Claims Process
- Auto insurance claims can take longer to resolve, especially if there are disputes about liability or coverage. This delay could slow down critical repairs to your home.
Why File with Your Homeowner’s Insurance First?
Your homeowner’s insurance policy is designed to provide comprehensive coverage for situations like this. Here’s why it’s the better choice:
- Replacement Cost Coverage
- Unlike auto insurance, your homeowner’s policy pays for the full cost to repair or rebuild your home without factoring in depreciation.
- Additional Living Expenses (ALE)
- If you need to temporarily move out of your home, your policy can cover hotel stays, meals, and other costs associated with displacement.
- Subrogation Benefits
- After covering the costs of repairs and expenses, your homeowner’s insurance will pursue subrogation to recover the money from the driver’s auto insurer. This means the claim won’t negatively impact your insurance record.
- Quicker Resolutions
- Filing with your homeowner’s insurance often leads to faster resolutions, allowing you to begin repairs and return to normal life sooner.
The Process: What You Should Do
- Contact Your Insurance Agent
- Notify your homeowner’s insurance company about the incident and file a claim. Provide them with details, including police reports and photos of the damage.
- Pay Your Deductible
- You’ll need to pay your homeowner’s deductible, but this is typically far less than the total cost of repairs.
- Let Subrogation Work
- Your insurance company will handle the process of recovering costs from the driver’s auto insurance.
- Document Everything
- Keep records of all communications, receipts for temporary housing, and repair estimates. These documents will support your claim.
Key Takeaways
When a vehicle crashes into your home, it’s a unique situation where your homeowner’s insurance policy is the hero. Even though you may need to pay your deductible upfront, the long-term benefits of comprehensive coverage, replacement cost payouts, and additional living expense coverage far outweigh the limitations of relying solely on the driver’s auto insurance.
By filing with your homeowner’s insurance, you’ll get faster, more complete repairs and the peace of mind that comes with knowing you’re covered.
