When to use insurance?

I am curious when you all actually use the insurance on your community? We currently have insurance through Mobile Insurance.

A storm recently came through one of my communities and brought a tree down on a home. The tenant paid for their damages to their home, but I had to remove the tree. A $950 expense seems like too small an expense to make a claim for, but it made me wonder how large an expense needs to be before I make an actual claim.

Any thoughts would be appreciated!


Only claim I’ve ever filed was when a rental home had a water leak and required probably $6k in work. (One of the reasons I no longer own any rentals!). I have a community mailbox insured for $5,000, I guess I’d file a claim if a tree fell on that.


You policy will have a deductible which is the amount to pay the insurance company to take care of it.

Everyone has different opinions on when to use it versus cover it yourself.

But you should be aware when you try to switch insurance companies they may ask for a loss run report to see how many claims you have with your current carrier, which weighs into a risk score and ultimately the premium the insurance company will want from you every year.

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Thank you for the response. I am always happy to hear from other competent community owners. However, your ambiguous response mirrored what I already know, which is why I asked in the first place :smile:

How do I determine whether a claim is worth the increase in “risk score?” I will not run any of my communities without insurance, but insurance feels like a massive waste of money if it is never used. I have no intention to claim everything, but I would like to have a better understanding of what expense point should be claimed. $1,000, $5,000, $10,000, or more?

Pretty unfriendly response. Good luck to you.

I had zero intention of being offensive in any way. I have always appreciated your responses on all posts. Furthermore, I take time to read your responses whenever you provide them on the forum. Please accept my apology, and please do not allow my inability to effectively communicate prevent you from providing me or others with your wisdom.

I believe my emoji was unclear, which is why communication through writing is so difficult to decipher tone. All I was trying to convey is that I truly did appreciate your response, but I was looking for more detailed information based on your experience, which is vast.

Again, I am sorry. I feel awful that you were offended by what and how I wrote my response to you.

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Thanks for replying, we are good Eric :slight_smile:

I’ll try to answer a bit more direct about my philosophy on this . I try to have my carriers assign a deductible of 5K or more to my policies if it will give me a lower rate (some commercial carriers don’t care, but have seen a decent reduction on POH policies - for example).

Between the paperwork and headache of claims (e.g. my time is valuable) and then the unknown risk of how much my policy will go up the next year - I just eat it when the loss is near there. Is this a good answer? I like it for me, but some people may have had better luck with their carriers or a different approach that makes sense for them.

We had a big freeze this winter and had 3-4 instant hot water heaters explode when they froze. The aggregate damage was about $5,000. Ate it and still feeling good about it. First major issue like that in several years too, no claims still.

If I could get a good break on my premium for a 10K deductible I would consider it but haven’t found a carrier for my markets that will do that…


Every park and operator is different. For me personally, I get the maximum deductible, and am aiming to use my insurance for nothing beyond liability. If I file a claim and my insurance goes up by say, $2k a year, at an 8 cap that is a $25,000 value loss.

IMO you shouldn’t buy insurance to protect yourself from $20k of storm damage, but to protect yourself from the unlikely event of a $500k lawsuit.

Probably the only time I would call insurance is if I got hit with a significant tort lawsuit.


Your insights are very informative. I wanted to make sure that I wasn’t missing out on saving money by not making claims that everyone else may be making. I will continue to hold off on making claims.

Thank you both for your responses!

We don’t have a fixed threshold, but I can tell you we have had $4,000 in damages that we did not claim and we have had $25,000 damages that we did claim. For the one claim that we made, our insurance was terminated within 30 days and we had to re-underwrite at higher rates for at least 3 years. I would never claim a $950 tree removal to insurance.


Very good to know. Thank you for sharing. This is what we all seem to be afraid of, but I had not heard anyone provide a negative experience like this. You have all led me to move extremely cautiously at the thought of an insurance claim.

Much appreciated,

I have also been dropped by a carrier after filing a claim after a windstorm. They paid the claim, but dropped coverage of the POH thereafter. This is a difficult coverage to find (affordably.)

I would put the bar at about 3-5x the annual premium. If you have a loss of more than 3x the annual premium, maybe that’s about when to start thinking about claiming a recovery. Compare to auto damage claim?


Brandon, thanks! I have been trying to create as many rules of thumb as I can throughout the business. As we continue to expand, I need to have more guides to speed up our decision-making process, and your 3-5x the annual premium is the kind of thing I am looking for.

Everyone continues to be so helpful on the forums. You are all the best!

First things first, if you haven’t already take any steps to help remediate the issue (dry up water, run dehumidifiers, etc). Take photos before and after. This will show you did your due dilligence to try and alleviate the issue should anything arise during the claim process.

Note that I am not an insurance adjuster or lawyer, just a typical homeowner, so take all of my advice with a grain of salt, and consult a lawyer when in doubt.

My rule on my properties is that unless a property damage insurance claim is going to net me $5k or more, I pay the loss myself. Insurance should be managed like all other assets. Small claims don’t typically hurt much by themselves. But if you have a few small claims and then a sizable one, it’s likely your next insurance policy is going to cost 2x to 3x more for a few years. My advice is to manage the smaller property loss issues yourself, and save the insurance for when you really need it.

However, if you have a liability claim/demand - someone is allegedly hurt in particular - don’t fool around with those. Report them and let the experts manage it. Liability claims generally have a $0 deductible. And if you don’t report claims in a timely manner, you run the risk of causing prejudice to your insurance company’s defense efforts and possibly forfeiting coverage you had previously.