Property Insurance – Should I file an insurance claim?

Written: January 26, 2013

InsuranceIt’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
Knowing your deductible and having an idea of how much the damage will cost to repair will help you determine if a claim is worth filing?  If the cost of repairs is comparable to your deductible, it may be best to simply pay out-of-pocket and avoid the insurance company.

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
Even if the repair cost is higher than your deductible, you should weigh the benefits and risks before filing a claim. For example, many experts recommend that filing a claim should be avoided unless the damage is triple the deductible. The reason? Multiple claims could result in higher rates or even dropped coverage at renewal time. So in the event of a loss, it’s important to compare the short-term expense of fixing the damage yourself to the long-term cost of potentially higher rates or no coverage at all.

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
Before filing a claim, always read your policy – declarations, endorsement, coverage limits, exclusions, etc. If you don’t understand the details of your policy, call your insurance agent or company and ask for an explanation. Then make some notes for future reference.

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.

4. Documentation
When you call your insurance company’s claims department to file your claim, you will be given a claim number and a claims adjuster will be assigned to your claim. Make sure to keep track of names, telephone numbers, email addresses, and make notes, including dates and times of every contact you have with all involved parties.

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.


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TRIO - "Turning Risk Into Opportunity" We are all surrounded by risk. It's no wonder we can easily find ourselves consumed by our efforts to control risk and we can't see how the risks that surround us can be turned into opportunities. Here we will share what we have learned to help your organization look beyond the transaction of insurance and find the hidden costs within organization.

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