Your home and auto insurance covers a wide range of perils. From theft and vandalism covered by your comprehensive coverage to house fires covered by structural damage and personal belongings protection, it is nice to know that you have a safety net in the face of an unexpected loss. Of course, not all losses warrant the need for a claim. Even if your loss is covered, there are some cases where filing a claim could actually cause more harm than good. Continue reading to learn about 4 common insurance scenarios that could leave you wondering if you should file a claim. While these are meant to be examples and not guidelines for how to manage your own claims, they can give you greater insight into the types of factors you might want to consider going forward.
Four Scenarios That Could Leave You Wondering
1. A storm causes damage to a homeowner’s roof. After seeing his neighbor’s insurance company pay the claim, he considers filing a claim, too.
If there is significant damage to a roof after a storm or other covered event, filing a claim may indeed be the best course of action. However, there are some factors to consider. First, if the roof is older, the insurer may not cover the full cost of roof replacement – only the depreciated cost, or Actual Cash Value (ACV). If that depreciated value is less than the cost of the homeowner’s deductible, there is no claim to be made. Secondly, what one person’s insurance covers may not be covered under another’s policy. We would recommend having any possible damage inspected by a professional roofer and then talking with your independent agent about pursuing any claims.
2. A vandal breaks into a car and steals a purse, smartphone, and tablet. How should the driver recover her loss?
If the owner of the vehicle has comprehensive insurance coverage, it likely covers vandalism. However, she will need to pay a deductible to help cover the cost of the damage. If the cost of repairs is less than the deductible, there is no claim to be made. Even if the damage was slightly greater than the deductible, a single claim could cause insurance rates to rise, even if the claim is for a small amount.
Unfortunately, the personal belongings stolen from the vehicle will likely incur a separate deductible, since they would typically be covered under a homeowners or renters insurance policy. The same principle applies – a loss that is less than the cost of the deductible is not likely to yield any reimbursement.
3. An at-fault driver causes an accident that results in an injury to another driver and him or herself.
In this scenario, the at-fault driver should definitely report the accident to his or her agent. Bodily injury and property damage liability expenses can quickly get out of hand, as can personal medical costs. Reporting the incident in a timely way helps ensure the driver is protected from the financial damages of a lawsuit and other accident-related costs.
4. A driver has multiple small claims on his record but needs to file a new claim for hail damage. Is that a good idea?
Technically, the driver could file a claim for any loss covered under his insurance policy. However, doing so with a history of other recent claims could result in much higher insurance premiums or even cancellation of the policy altogether. Insurers review driver claims history for as much as 3, 5, and even 7 years depending on the state and company. Too many claims in too short a period of time (even ‘small’ claims) can cause a driver or homeowner to be flagged as high risk.
Fortunately, when it comes to claims, you do not have to do it alone. By working with an independent agency like Ellis Insurance, you can benefit from professional claims assistance that works in your best interests – not the insurer’s. Contact us today for more information or to request your free quotes. We look forward to serving you soon.