“I’ve Paid Insurance for Years — Shouldn’t I Use It?”

It’s a question we hear all the time after a loss:

“I’ve paid a lot of money into insurance over the years — isn’t this what it’s for?”

It’s a completely reasonable thought. After all, insurance premiums aren’t cheap, and when something breaks or gets damaged, it feels only fair to get some of that money back.

But here’s the key reality most homeowners are never told clearly:

Insurance isn’t a savings account or a reimbursement plan.
It’s a financial safety net designed for large, unexpected losses — not routine or moderate repairs.

Why “Getting Your Money Back” Doesn’t Really Apply

Insurance premiums don’t build up in an account with your name on it. You’re not paying into a personal fund that you later withdraw from. Instead, you’re participating in a shared risk pool that’s priced based on probability, claims history, and underwriting appetite.

When you submit a claim, several things happen that most people don’t see:

• Your claim becomes part of your permanent insurance record

• It can affect future pricing, eligibility, or renewal terms

• Carriers reassess your risk — even if the claim is legitimate

• Multiple claims (or even one moderate one) can change how insurers view your household

So while a loss may be “covered,” that doesn’t automatically mean it’s advantageous to file a claim.

The Deductible Reality Check

Another surprise for many homeowners is how much of a claim they actually keep.

Between:

• Higher deductibles (which we now commonly recommend at $5,000)

• Depreciation on older structures or materials

• Coverage limitations or exclusions

A $15,000 loss can easily turn into a much smaller net payout — sometimes only marginally above the deductible.

That’s why we generally advise clients to follow a simple rule of thumb:

Don’t submit a claim unless the loss is roughly 2–3× your deductible.

This approach helps ensure that when you do involve insurance, it’s for a loss significant enough to justify the long-term impact.

Why We’re Recommending Higher Deductibles

Insurance has changed. Carriers are far less tolerant of frequent or smaller claims than they were even 5–10 years ago.

Higher deductibles:

• Keep premiums more stable

• Reduce the likelihood of problematic claims history

• Preserve access to better carriers

• Position insurance for catastrophic losses, where it truly shines

In other words, insurance works best when it’s treated like disaster protection, not a maintenance plan.

So When Should You Use Insurance?

Insurance is ideal for:

• Major fire or water losses

• Significant storm damage

• Liability claims

• Losses that would be financially disruptive to absorb personally

For smaller or moderate losses, it’s often smarter to:

• Get an estimate first

• Compare it to your deductible and the 2–3× rule

• Make a decision before opening a claim

Once a claim is opened, the toothpaste is already out of the tube.

The Bottom Line

It’s natural to feel like you should “use” insurance because you’ve paid into it for years. But the real value of insurance isn’t in getting money back — it’s in protecting your financial stability when something truly big goes wrong.

Used strategically, insurance is one of the most powerful tools you have.
Used casually, it can quietly become very expensive.

If you’re ever unsure, the best first step is simply to ask — before filing — so you can make an informed decision.