Insurance is something everyone has, but hope they never have to use. Not all of us are this lucky, however.
Whether a storm rolls through your neighborhood and causes damage, or you accidentally back into a pole in a parking lot, the question becomes, “Should I Put in a Claim?
Some people are quick to file a claim without considering their options, but what they do not realize is this is not always the right decision.
Your homeowner’s policy has a $1,000 deductible and you have had no previous home claims. A nasty storm comes through your town, tears off some of your siding, and causes a little damage to your roof.
One may see the damage and instantly want to file a claim, but make sure the following steps are taken.
First off, include your agent in the conversation. Understand that your CRG agent is on your side, and is looking out for your best interest.
Let us know what happened and get our opinion on the situation. Your agent can provide helpful information while guiding you through this process.
Be sure to get an estimate of what the repairs will cost. This will ultimately play a huge role in determining whether it’s worth filing a claim.
If you file the claim before you get an estimate of the damage, you may realize putting in this claim wasn’t worth it.
So you get an estimate and it turns out to be $1,750.00 to repair all the damages. Looking at that number you are thinking about how much you DO NOT want to pay for all of this.
You want to put in a claim, but before you do this you give your CRG agent another call to let them know what is going on. Your agent explains your options and what may happen if a claim is filed.
Purpose of Insurance
Insurance is provided to cover costs you cannot afford. As opposed to health insurance, home/auto insurance is meant to pay for more catastrophic occurrences. While you can put in a claim for this situation, in the long run it is not a wise decision.
Worst Case Scenario
Let’s say you decide to put in the claim. You pay your $1,000 deductible and your insurance company pays for the rest of the repairs ($750).
A month later, another storm hits. This one is much bigger and causes a large tree to fall on your house. The cost of all the damages is extensive. You need to put in a claim for this situation because you actually cannot afford to pay for the repairs.
A few weeks later you receive a non-renewal letter from your insurance company due to your claim history.
While the odds of this situation actually happening are slim, there is a laundry list of reasons not to put in the first home claim.
First off, your rates will most likely go up. Your next renewal will probably have an increase in your premium due to the claim.
After a few years, due to higher premiums, it was actually cheaper to have paid the initial claim out of pocket.
The previous hypothetical emphasizes another reason; putting in multiple claims in a short amount of time puts you at risk of being non-renewed from your insurance company.
The last reason is simple. If you can afford to pay the full amount, putting in a claim for your insurance to pay a small amount of damage does not make sense.
This is not meant to discourage anyone from putting in a claim.
How We Help
You have insurance for a reason. However, your agent should always be included in the discussion.
Not only does it keep us in the loop, but we can offer expert advice on situations we come across often. Having an agent to turn to when you are faced with difficult life decisions is very beneficial.