Accidents – no matter how big or small – can be costly, especially when there are injuries or substantial property damage involved. Whether you caused a collision or suffered a house fire, it helps to know you can rely on your insurance company to help pick up the pieces. After all, you purchased your coverage for a reason; why not use it? Before you file a claim, consider that the benefits do not always outweigh the drawbacks. Continue reading to find out what you have to gain or lose when filing a claim.
Higher Premiums and Cancellations
Filing a claim may save you now, but it could cost you far more in the future. If you currently have any claims-free discounts applied to your premiums, they will likely be removed right away. Furthermore, a new claim can affect the risk that insurers perceive you to be in the future. Your policy may be renewed at a higher rate, or you may be dropped from coverage if you have a recent history of other claims. Insurers often look back 3 to 5 years, and sometimes as much as 7 years in your claims record when assessing their risk of providing coverage. Unfortunately, insurers share their information with other insurers, so the claims history is likely to follow you if you switch companies.
Out of Pocket Costs
When you file a claim for property damages against your own insurance policy, you will be required to pay a deductible. For vehicles, this is often a few hundred dollars, and for homes, it could total thousands. If your claim amount is less than the amount of your deductible, you will have to pay for damages out of your own pocket. Likewise, a claim that is only slightly more than your deductible may still not benefit you long-term, since any potential savings are likely to be absorbed by increases in insurance premiums.
Should I File a Claim?
At the end of the day, you have insurance to protect you against financial hardship in the event that you are responsible for an accident or the victim of a theft, burglary, house fire, or some other unfortunate event. In some cases, filing a claim may be unavoidable – especially if it involves a major loss or liability for someone else’s loss or injury. However, if you only suffer a minor loss isolated to your own personal property, you might consider paying the damages out of pocket – especially if the total is not much more than your insurance deductible.
Of course, your most powerful tool when making decisions about insurance claims is your independent agent. An agent can do much more than help you find a great deal on home or auto insurance. In fact, you can rely on your agent to provide claims assistance and help you understand how filing a particular claim might affect your rate or your risk of cancellation.
Here at Vanyo Insurance Group, we can help you make an informed decision about your claims. We consider many different factors, such as:
- Your state of residence
- The policies of your current insurer
- How long a claim might affect your rates
- How many claims are already on your record
- The type and severity of the claim
- Whether filing a claim is necessary to prevent further damage
If you are a Vanyo Insurance customer, you do not have to make difficult claims decision on your own. We will continue to be there for you long after you purchase your policy, with helpful advice and assistance filing claims. If you are not yet a Vanyo Insurance customer but want access to competitive rates on the coverage you need, contact our office to request your free quotes today.