You noticed a few dings in your car hood after last night’s hail storm. Should you call your insurance company? Filing a claim might be an option in this scenario, but doing so could cost you more than it benefits you. While there are some damages, such as liability and major personal losses, which are better left to the insurer to handle, smaller personal claims might be better handled out of pocket. Continue reading to learn some of the things that might make you reconsider filing your next claim.
Higher Rates
One of the biggest downsides to filing a claim is the possibility of paying higher rates for coverage in the future. Insurance companies like to reward claims-free homeowners and drivers with preferred policies and discounts. If you file a claim – even with a previously excellent record – you might see your rates go up significantly.
In fact, you might be surprised to know that most insurers consider the number of claims you make to be more significant than the amount of the claims. This is particularly the case of comprehensive insurance claims for small damages to your vehicle caused by a non-collision event. The insurer may see you as a high-risk driver who is likely to file additional claims in the future. When it comes to other types of coverage, such as your liability insurance, the type and severity of the claim often comes into play. If your dog bites a neighbor’s child for example, the claim could be seen as more severe than some wind damage to your fence.
Claims that are Close to the Same Amount as Your Deductible
Your deductible is the amount you must pay toward your personal losses. While it does not apply to liability coverage, it is typically required when you make a claim against your collision, comprehensive, structural damage, or personal belongings coverage. If the amount of a claim is equal to or less than the cost of your deductible, you probably should not bother with it. Even if the cost of your claim exceeds the deductible, make sure the amount of the loss covered by your insurance company is worth more than what you could potentially pay for in future premium increases.
Depreciated Assets
When it comes to high-value personal belongings, be careful when filing a claim. For example, if a thief makes off with your $4,000 wedding ring, it is probably covered under your policy. However, unless you itemized it on your coverage and had it appraised, you are unlikely to recover the actual price you may have paid for the ring. Instead, you might be reimbursed for a fraction of the loss due to limitations for theft of jewelry. Factor in your deductible, and you might walk away with nothing to show for it but a new claim on your record.
Threat of Non-Renewal or Cancellation
Insurance companies are not required to provide coverage if they deem you too high-risk to insure. When you have a history of multiple recent claims, you might be at risk of non-renewal or even cancellation of your policy. Once you are dropped from coverage, you will have to work closely with your independent agent to find an insurance company that is willing to take you on despite your claims history.
Should I File a Claim?
If you are on the fence about a claim, make sure to talk with your independent agent first. Here at the Reis Agency, we work closely with our customers to compare the short-term benefits with the long-term costs of filing a claim. We can help you navigate your policy and better understand how today’s claims could affect tomorrow’s coverage. If you are not yet working with an independent agent, give us a call to find out how we can help. We’ll offer you a risk analysis, coverage review, and free quotes on the coverage you need Call us today for more information. We look forward to serving you soon.
