You can count on your insurance to be there for you when you face a major loss or lawsuit. While you never anticipate needing to file a claim, it helps to know you have someone on your side when the unexpected occurs. Of course, things do not always go as planned. What seems like a simple claim can quickly turn into a situation you were not expecting. At Heinen Insurance, we want you to be prepared for any scenario. Continue reading to find out some of the possible negative consequences of filing a claim and what you can do to prevent them.
Insurance companies can raise your rates or remove discounts from your coverage if you file even a single claim. In the case of significant losses, the higher rates do not matter when factoring in the value of the loss. On the other hand, the threat of paying hundreds more per year in car insurance premiums might make you think twice about filing a small claim for a damaged taillight.
If you file a claim for the loss of personal belongings or damage to your car or home, you will be required to pay a deductible toward the cost of the claim. If your deductible is equal to or more than the value of your loss, there will not be any benefits paid by the insurance company. Unfortunately, the claim still goes on your record and can result in higher premiums in the future. So if your loss is less than, or even slightly more than your deductible, it might be in your best interest not to file a claim at all.
Keep in mind that it is your insurance company and your policy that determines the value of your loss. For example, high-value items might have limitations on coverage unless you had them appraised and itemized on your policy. Likewise, your claim will only be reimbursed according to its actual depreciated value or its replacement value – whichever is listed in your policy. Finally, your insurer may also require an adjuster to review your loss to determine the extent of the damage and how much you will be compensated for your loss.
It is possible that your claim could be denied for a number of reasons, the most obvious of which being that your loss is not covered under the terms of your policy. You might also be denied if you wait too long to file a claim, as many insurance companies require prompt filing. However, there are also some ‘gray areas’ that may require in-depth review or investigation. Your independent agent can provide some insight into situations that may result in a denial and help you determine if filing is still the right decision for you. If you report the claim and it comes back denied, it can still be recorded as a claim, affecting your insurance coverage and premiums for years to come.
In rare cases, an insurer may choose to drop a customer entirely due to the perceived high risk of continuing to provide coverage. This often occurs if you have filed claims that appear more severe than others, such as a wreck you caused while driving intoxicated. It can also happen if you file too many claims in a short period of time.
Should I File a Claim?
Before you do anything, contact your independent agent to discuss the details of your loss. If you caused an injury to someone or some type of property damage, reporting it to your insurance company can help protect you against a possible lawsuit. When it comes to personal claims, however, it could pay to compare the details of your loss with your deductible, coverage, and claims history.
Working with an independent agent provides a level of service not available when you shop for coverage online. At Heinen Insurance, we’re on your side. For more information about personal claims assistance or to request your free quote, contact our office today.