Claims come in all types and sizes. From burst water pipes that flood your home to minor fender benders that leave you with little more than a damaged taillight, it ‘s nice to know you can rely on your insurance company to pick up the bill when the unexpected occurs. Of course, any loss that is covered under your insurance policy may qualify as a potential claim, but filing a claim is not always in your best interest. In fact, there are times when filing a claim can actually cost you, rather than save you money. Continue reading to learn which claims should be filed, as well as which ones you might want to reconsider.
Does the size of the claim matter to the insurance company?
Not really. Most insurance companies are far more concerned with the number of claims you file and the type of claims you make than they are with the cost of them. In other words, several small claims could be a bigger problem to an insurer than a single catastrophic claim, since it might be viewed as an indication of your future claims behavior. When you have multiple claims in a short period of time, you might face major rate hikes or even non-renewal of your policy. The same principle applies to the type of claim you make. If your dog bites a neighbor, requiring them to get stitches, you might be penalized more harshly than if you file a claim for a crack in your windshield.
Should the size of the claim matter to me?
If it is a personal property claim, yes. When you file a claim for damages or loss of personal belongings – whether your house, your car, or something else – you must pay a deductible. Depending on your policy, this could be several hundred or even thousands of dollars. You should get have an idea of how much your loss will be valued at by the insurer before making the decision to file a claim. It your deductible is more than your loss valuation, filing a claim would net you no compensation, but it could still result in higher premiums. Likewise, if your loss is slightly more than your deductible, talk with your agent to determine if your upfront savings are enough to offset a higher rate.
How long will a claim affect my rates?
This is largely dependent upon your insurance company and the regulations within your state. Generally, insurance companies are allowed to consider your claims activity for the prior 3 to 5 years, although some may look back as far as 7 years in your claims history. A single claim could disqualify you from a preferred policy or a claims-free discount. Multiple claims could result in premium surcharges. Some insurance companies may even deny coverage based on an active claims history.
Should I file a claim?
If you experience a loss, the first step is to make sure everyone is safe. Then, do whatever you can to safely prevent any further damage. Finally, contact your independent insurance agent as soon as possible to discuss the nature of your loss and whether filing a claim is in your best interest. If you do not have an independent agent, there are many benefits to finding one, including personalized service and advice that is not available when you shop for coverage online. For more information about claims assistance or to request your free quotes, contact our office today. We look forward to serving you soon.