Written: January 26, 2013
It’s no surprise that many consumers are afraid to submit a claim as most insurance carriers will either increase their premiums or simply decide to stop offering coverage.
The reason a claim may affect your future premiums and/or coverage is that every claim you have increases the probability of another claim and therefore, another loss to the insurance company.
Most consumers may feel that a claim should be filed for any loss that occurs however, here is a list of items you may want to consider before submitting a claim:
1. Cost of Repairs
Although a high deductible will obviously mean greater out-of-pocket expenses in the event of a loss, the lower policy premiums may mean long-term savings.
2. Impact to Future Premiums and/or Coverage
Should you lose your existing coverage or decide to switch companies, you won’t start with a clean slate. Every time you file a claim, it goes into an industry database called the Comprehensive Loss Underwriting Exchange, or CLUE. Insurers use it a lot like potential lenders use your credit score – to evaluate how much risk you represent.
As with your credit file, CLUE tracks your history for seven years, and you can pull it free once per year. You can visit LexisNexis for a free annual CLUE report. (You can get a similar report for auto claims too.)
The Insurance Consumer Advocate Network (ICAN) recommends filing no more than two claims in three years, but your agent should be able to provide advice regarding the risk of a rising premium or being dropped in the event of a claim.
3. Read Your Policy
Your state’s insurance department may also be able to help, especially when it comes to the law and your rights. Some states maintain consumer hotlines or even publish insurance guides to help.
Hopefully you also have a home inventory. If not, now’s the time to get started. We recommend taking a video of the interior of your home, including all closets, cupboards and drawers.
If you have any additional questions or would like to know how we can help with your insurance needs, don’t hesitate to contact us.