Here are some things to think about before you file a claim.
When is it wise to file a claim and when is it not a good idea to file a claim?
How big is the loss?
First of all know that insurance is for paying for claims that may cause financial hardship for you, the policy holder, or someone you cause to suffer a loss. The first question is l how big is the loss? If the loss is substantial it is always a good idea to file the claim.
For instance if you roof has hail damage, your house has major water damage from a broken pipe, or you have suffered an expensive fire loss, then you probably should file the claim. Your insurance policy is designed to protect your financial status when large losses occur.
Always File A Claim.
1. If you have a major auto accident where your car hits someone else and there is a lot of damage. You should always file the claim.
Never agree at the scene of an accident to pay the damage from a car accident out of your own pocket if you caused the accident. You never know how much damage to a car has been done until the auto has been inspected by a professional auto mechanic. You could be agreeing to pay thousands of dollars on what may appear to be a very small amount of damage.
Buy the way, do not admit fault at the scene of an auto accident. Call the police and tell your side of the story. The insurance companies will determine who was at fault by the police report. You may not be at fault. You may not owe the other person even if they say you were at fault.
Never agree to allow someone to pay you out of their pocket if they caused an accident to your vehicle. Someone may say to you, “I have some things on my record. If I get another accident my insurance will go up, so I want to pay you out of my pocket.” This is NEVER a good idea. The damage may look small, but if it runs into hundreds of dollars, the person may decide they will not pay. If the auto has already been repaired, you can’t file on the insurance policy.
What if the repairman doesn’t repair the damage properly? The person who agreed to pay will not want to pay for additional damage the repairman overlooked or did not do right the first time. An insurance company will pay for additional damage if it can be shown to be part of the original loss.
2. When someone is injured or appears they could be injured you should always file the claim. This is true for auto accidents or any kind of accident involving a injury. The injured party can sue you even if it has been months or years since the accident. Your insurance company requires you to report the claim promptly so they can investigate it as soon as possible. If you do not report it until much later, the company can deny coverage and refuse to defend you.
3. If someone accuses you of causing an accident, even if you disagree, you should file the claim. Or at least talk to your insurance agent. When someone thinks they have suffered a loss, they will likely try to recover what they believe they have lost. They could sue you. If this happens, you need your insurance company to defend you.
4. If you have a large theft claim you should file it as soon as you discover it. A theft claim has a time limit on it. You must have all information the company requires sent in to the company within 90 days. If you delay reporting it, the company will probably deny it.
When should I not file the claim?
If the loss is small it is probably a good idea to fix it yourself. Many small losses may not be more than your deductible. Before filing the claim, check your policy and see what deductible you have. If you would benefit only a few dollars, you may be better off not filing the claim. You may be better off not having the loss on your record.
If you have already claimed on several losses that were not caused by the weather, hail, lightning, wind, or tornado, you need to check with your agent before you file.
You may be wondering:
1. Will the insurance company cancel my insurance policy if I file this claim?
2. Will the insurance company go up on my insurance rates if I file this claim?
3. If my policy is cancelled what will happen then?
An insurance company may cancel a policy for too many claims.
If you have had more than three non-weather related losses on your home the company may cancel your policy. This means fire, theft, water backup, explosion, or liability claims. The company may view too many of these kinds of claims as a failure to keep the property in good condition. Most of the time, these claims can be prevented. One or two events will be considered accidental, three or more will be considered as lack of care in maintaining the property.
To many traffic violations, such as speeding, failure to stop at a stop sign, failure to wear a seat belt, etc may cause your insurance to go up or to be cancelled. Also two or more accidents reported on an insurance policy will cause the policy to raise in rates or be cancelled.
A frequently repeated phrase around the insurance is, “Frequency precludes severity.” In other words, someone who is having frequent small violations or accidents will likely have a severe accident unless something changes. This is reasonable. Someone who is a careless driver is much more likely to have an accident than a careful driver. The insurance company rewards the good driver with lower premiums and charges the careless driver a penalty for the claims he/she causes.
If you have a number of claims on your policy and are cancelled for too many claims, you may have to pay a high premium to get insurance with another company. There are special companies with policies designed for high claim risks. The premiums are very high. You want to avoid these if at all possible.
If you are unsure if you should file a claim or not contact our team FIRST and we will get the facts for your situation. We will help you make a good decision.
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