You have a great insurance policy that you worked with your independent agent to custom fit your needs. Your spotless record and claims-free history have qualified you for a preferred policy and a discount on your rates. Now that you have experienced a loss, you worry that your coverage may be in jeopardy. Should you file a claim, or should you foot the bill out of pocket? Continue reading to find out when filing a claim is a good idea, and when it is not.
If you are directly or indirectly responsible for another person’s loss or injury, you could be held financially liable for any damages. Lawsuits can cost tens or even hundreds of thousands of dollars in legal fees and judgments, which are typically covered under the liability coverage on your home or auto insurance policy. Since these types of losses can lead to major financial setbacks, liability damages are almost always worthy of a claim. If you have any indication that you may be liable for another person’s injury or loss, contact your insurance agent immediately.
Major Personal Losses
From your car and home to all of your personal belongings, you have invested a lot into the things you own. If a fire, collision, burglary, storm, or other covered event wiped out everything you own, insurance could help you get a fresh start in life. Even if you must pay a deductible and higher rates on future coverage, the cost typically pales in comparison to what you would have had to pay to cover your own losses.
Small Personal Claims
If you have a small personal claim to make, such as for a damaged taillight or a petty home theft, you might want to think twice before filing a claim – especially if you already have a history of prior claims. Studies have shown that filing a claim of just $2,000 could increase auto insurance rates by as much as 41 percent, and two claims in one year could double them. Considering insurance companies can continue to factor in previous claims for up to 3, 5, or even 7 years, the long-term cost of filing your claim could leave you paying more in premiums than you would have out-of-pocket for your loss.
We always recommend itemizing high-value items on your personal belongings coverage to ensure they are covered in the event of a loss. Things like jewelry, fine art, and weapons are often covered with limitations on your standard coverage. If you fail to itemize high-value belongings and do not get an appraisal, you might face difficulty attempting to recover the loss. For example, a $5,000 wedding ring might only qualify for $1,500 of coverage under your policy. Take into account a deductible, and you might walk away with little or no reimbursement for your loss. You will, however, have a claim on your record that could still result in higher rates.
Talk to Your Agent
It pays to talk to your agent before filing a claim. An independent insurance agent works for you – not the insurance company. You can get unbiased advice and guidance when it comes to navigating your coverage and determining whether to file a claim. We can help you determine whether a claim is right for your situation and what to expect during the process.
If you do not have an independent agent, we invite you to find out how Carrigan Insurance can serve you both now and in the future. Contact us to find out more about claims assistance and to request your free quotes today.