Insurance companies are supposed to be around to help you when things go awry and life throws you a curveball. Although this is a nice thought, it’s not always the case. There are many times when a company, whether it is because of company policy or state law, will happily take your claim and pay out accordingly but then kick up your rates or drop you for being too high risk when time comes to renew. Knowing when to file an insurance claim, and when to pick up the bill yourself, can help you avoid problems in the future.
When to File
- When there is significant damage
If your home has sustained significant damage that is simply too much for you to pay by yourself (your house burns down, an entire floor is flooded, etc.) then it is obvious that you will need to file a claim.
- After you review your policy
Reviewing your policy is one of the most important first steps you can take. Not every policy is the same nor is every company or state law. Knowing the ins and outs of your personal insurance policy, including what they will and won’t cover, is vital to making an initial claim.
General insurance policies simply do not usually cover quite a few things. You may think that floods will be covered but they usually are not and are specifically differentiated from other types of damage. For instance, a flood in your basement caused by a burst pipe isn’t considered the same type of flood as a flash flood. Also, it’s a different kind of flood than having a storm that creates a hole in your roof and floods your home. Knowing these little nuances can help you file claims that they will cover and reduce the risk of any problems occurring with your claim or policy.
When Not to File
- If the repairs are less than your deductible
If you’re looking through your policy and find your deductible, take the time to calculate the amount that you would owe the insurance company versus what you would pay out of pocket for repairs. If the repair costs are less than what you’d pay for your deductible, then get it repaired yourself.
- If the damage was preventable
Claims adjusters that are hired by the insurance company are there to try to deny you a claim. They’ll look for anything they can to do that. If the damage you had at your home was preventable (for example, if there were repairs that could have prevented the damage itself) then they will likely deny your claim.
- If you can pick up the bill and you’ve had other claims that year
Filing multiple claims in a year makes you run the risk of being considered a high risk client. This will make the insurer kick up your insurance rates or even simply drop you from your insurance.
