Insurance Claims: To claim or not to claim – What should I do?
Our team is proud to partner with and works closely with many insurance agents in helping to guide their clients in the claims process. The truth is that you pay for homeowners’ insurance to protect yourself if something happens to your property. However – there are times when you would be better off paying for the repairs instead of filing a claim.
Yes – it’s your insurance, you pay the premium, and you have all rights to file a claim, whenever you would like. But, you need to be aware of a few things that can come as consequences for filing unnecessary or multiple claims:
Difficulty finding coverage with other companies
There are some situations when it would be in your best interest not to file a claim:
- The repairs cost less than your deductible
- Damages are relatively minor
- You’ve filed more than one claim in the last decade
- The claim was caused by poor maintenance on your part
- Your policy doesn’t cover the cause of the claim
This is where the Thompson Building Associates team comes in. Our job is to help you determine if It makes financial sense to file an insurance claim. To do this correctly – we need to do a little math:
The First Rule: Our first piece of advice -rule don’t file a claim if you’re sure the damage is less than your deductible. If it is, you won’t recover a dime from your insurer, but the claim goes on your insurance record as a claim and may put you in a higher risk/rate category. This will remain even if you didn’t collect any benefits.
Once you have a ballpark of the approximate costsassociated with the claim – don’t wait too long. If you wait too long after a loss to notify your insurer – the insurer may suggest that you “prejudiced” their interests by failing to inform them promptly. They may even deny the claim on that ground. We’ve been fortunate and have not encountered this, but know that it can happen.
Do the Math: If the damage is less than a few hundred above your deductible – in our opinion, it probably not worth filing. Pay it out of pocket. Yes, it’s unfair to be penalized for using the insurance you’ve paid for. We understand that. Spending a little bit of extra at the time can save you much more in increased premiums over the years and the possibility of not finding insurance in the future.
Check With Your Agent: That is the great thing about having an agent that you know and trust. They are there for you, they are your advocate, and they will give you answers that you need. Ask your
agent – how much will my rate go up if I file one, two, or more claims? Does it matter how far apart they occur? Keep their answers with your insurance policy in the event that you need them for future reference.
Decision Time: If the damage is well above your deductible – go ahead and file. That’s why you pay for insurance. If your rate goes up as a result – express your concerns to your agent and the insurance carrier. Confirm that the increase was fair, consistent with the rating plan they filed with the state.
If, after doing your research, you learn that your insurer will penalize you for filing even one claim, consider switching to a more customer-friendly insurance company that has fairer rules. Many insurers
will not penalize you for filing just one claim – even if it was your fault.
Need more information? Need help in trying to decide? Give us a call, we are here to help! 614-863-9650