Claims Reporting – When to Contact Your Agent

You find water in the basement level of your home, or you back your vehicle into your own basketball pole in the driveway; fortunately, your insurance agent is just a phone call away. But WAIT!!

Do you realize that turning in a claim on your insurance; even if the amount paid is zero or ends up being less than $500, can STILL increase your premiums for the next 3 to 5 years???

Once a claim has been submitted to your insurance company, they can remove your ‘claims free discount’ on your next renewal, and that discount will stay off for a period of 3 to 5 years depending on the company. This can cost you hundreds of dollars in increased premiums over those years.

For this reason, we have begun to educate clients that certain losses should be discussed prior to them contacting us. Some examples of these include one vehicle claims such as bumping into your own property and no damage to the property but you notice a small dent in your fender; or a scratch that you got when pulling too close to your mailbox or sliding into the ditch and hitting a snowbank. Many times, these small claims should be handled and not turned into your insurance agency or company.

Homeowners Insurance as well has claims surcharges and the removal of the claims free discount. Some examples of claims that should be self-insured and not turned into your agency and company would be a lightening claim that only damages your microwave or a one single television. Not only are these small claims that should be paid out of pocket, with the average homeowner’s insurance deductible now being $1,000, many claims this small are not considered to be ‘covered’ anyway since you must exceed your deductible before insurance kicks in.

So, you have a situation like mentioned above. What do you do? – We advise that you immediately get an estimate for damages or repair and then make the decision if you want to turn the claim in after factoring in your deductible.

Note that I said ‘immediately’. You cannot contact your agent 6 months after the fact to turn in a claim due to your contractual agreement with the insurance company which requires you to let us know of possible claims as soon as possible.

If the loss is under your deductible however, then you have not suffered a claim that the insurance company would be responsible for, and should always take care of those on your own UNLESS someone else is involved and you have damaged their property or ANY injuries that occurred.

We understand that you purchase insurance to help pay for accidents, but insurance was not meant to be used to pay the small claims that can be paid out of pocket. Insurance was originally formed to help people with catastrophic fires have the money to rebuild their homes and not have to depend on others for help or be left without a home to live in. It was never intended to pay a $117 difference between a $500 deductible and a vehicle repair estimate of $617.

Again, any claim that involves more than one vehicle, that involves damage to someone else’s property, or that has any physical injury or illness involved, you MUST contact us, and those claims need to be turned into your insurance carrier.

This article is written to caution you, that for simple claims that can be paid out of pocket as described above, that you think through the scenario prior to contacting us to turn in a claim on your behalf.

Once you make the decision to turn in a claim, we will let you know about your deductible as well as an approximate amount of premium increase. If your insurance is going to increase by $900 over a 3-year period to pay the difference of $200 for the claim; it doesn’t make economic sense to submit that claim.

As always, we are here to help answer any questions you may have regarding your insurance whether you are insured with our agency or not.