To File or Not to File a Claim? That is the Question.

 By Catherine Powell

Image courtesy Pixabay

The reason most people carry insurance is to reduce the risk of property damage and loss.  Face it, most of us would be hard-pressed to replace our car or home should something catastrophic happen to either.  However, that’s not the only times when auto or property insurance come into play.  Sometimes a car or home is damaged instead of destroyed, or something inside of them is stolen.  Before you call your insurer to file a claim, there are a few things you need to consider that can affect the long-term impact a claim can have on what you pay for insurance.

1. What’s your deductible? – One of the first factors you should consider before filing a claim is how high your deductible is set.  If the damage is only slightly higher than the deductible, you really should think twice about filing a claim since the return on investment will hardly be worthwhile if it causes your insurance premiums to rise when it comes time to renew the policy.  

2. How serious is the damage? – Neither home insurance nor auto insurance is designed to cover minor damage or damage due to wear and tear.  Their purpose is to help policyholders recover from significant or catastrophic losses.  Keep that in mind before you file any claim, since all claims are reported to the Comprehensive Loss Underwriting Exchange (CLUE) which is reviewed by every insurance carrier.

3. Is the loss a covered claim? – One of the worst things you can do is file a claim that isn’t covered by your policy.  What happens then is that not only will you fail to be compensated for your loss, but the claim you filed will still be reported to CLUE which could negatively impact the cost or availability of insurance in the future.  Always review your policy or call your agent to determine whether a claim is covered by your policy before you file a claim.

4. Did the damage occur suddenly or over time? – One sure way to have a claim denied is to have an insurance adjuster discover that the damage was the result of time or negligence.  If a major storm causes a big tree limb to fall atop your roof, it’s safe to file a roof claim.  However, if a storm causes water damage that’s later determined to have been caused by missing shingles that you failed to replace, chances are your claim will be denied.  No insurer will cover you for wear and tear to your property.  Many policies even have failure to maintain clauses built into them for this very purpose.

5. When was the last time you filed a claim? – Another factor you need to keep in mind is how many claims you’ve recently filed.  Filing multiple damage claims in a short period of time can not only lead to higher future insurance rates, but it can also result in a non-renewal on the part of an insurer.    

6. When do endorsements apply? – You need to pay attention to damage covered by endorsements if you’ve paid to add extra coverage that isn’t normally covered by your policy.   Odds are any time these endorsements apply it’s warranted to file a claim since you specifically requested the coverage to keep you from taking a big loss.  Typical endorsements are taken out to cover such things as valuable jewelry, artwork, collectibles, or property damage that is normally excluded from being covered in a typical homeowner’s policy.

7. How do you file a claim? – If you’re certain that a claim is covered and worth filing, you need to contact your insurance company promptly to complete the required forms.  You’ll also need to gather the documentation that supports the claim.  Failure to do so in a timely manner can result in the claim being denied.  Do what you must to keep your property from being further damaged, but make sure you don’t dispose of any evidence needed by the insurance adjuster to validate your claim.  Make sure you document any repairs you do prior to the adjuster’s arrival, including all receipts and any repair estimates from contractors.  Last but not least, be courteous, truthful, and patient when dealing with the adjuster.

8. How long does it take to process a claim? – That depends on several factors, including how promptly you file a claim as well as how many similar claims were recently filed in your area.  While filing a claim for an auto accident is usually handled swiftly, obviously if a hurricane passes through your area resulting in major damage to numerous properties, you can expect it to take a bit longer for any insurer to be able to address your claim since their adjusters will be working overtime.  

9. What should you do if your claim is denied? – If your claim is denied, the insurer is required to send you a written statement that documents the reasons the claim wasn’t approved.  If it turns out that the loss wasn’t covered by your policy or you took too long to file the claim, there is little you can do to get compensated.  However, if you find that the damage should have been covered, you need to take up the matter with the adjuster sent to process your claim.  Failing that, you can hire a public adjuster to evaluate your situation.  If a public adjuster agrees to plead your case, he or she will only be compensated a percentage of the amount recovered.  If the claim is still denied, you won’t be out a penny.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com/