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Filing an Insurance Claim

Insurance is designed to protect people and their property for the “what ifs” in life. When the worst happens, insurance companies have your back. But does that mean filing a claim is always the best option?

It’s no secret that filing an insurance claim will likely increase insurance rates and in some cases even causes an insurance company not to renew a policy.

So how do you know when to file a claim or not?  It is best to consult your insurance agent. Your agent can analyze your current situation and the severity of the claim to provide feedback. Agents are real people, not an anonymous voice on the other end of the telephone line, not a Chat function on a website. The most valuable agent that works on your behalf is an agent who knows you, your property, your accident history, your objectives and your lifestyle.

Here are some items to consider when determining whether to file a claim or not.

  • How many claims have you filed in the last 3-5 years?
  • How much is the damage requiring repair?
  • Can you afford to pay for the claim yourself?
  • What was the cause of the claim?

Filing multiple claims in a 3-5 year span will cause increased insurance rates as well as eligibility issues for continued coverage. This is true of most insurance companies. Ask your business associates or friends, and you’re likely to hear a story of a single claim precipitating cancellation.

The biggest consideration when determining to file a claim is not the cost. If the damage exceeds what you can afford to pay on your own, the only option may be to file a claim. However, if you can afford to pay the claim it could save you in the long run. For example, if you have a $500 deductible and the claim encountered causes $1,000 in damage. It is your responsibility to pay the $500 deductible first, leaving the remaining $500 to be paid by the insurance company. Doesn’t sound too bad? Unfortunately, since you’ve made a claim, you now have a ratable claim on your record for the next 3-5 years which will increase your insurance rates over time. Odds are that increase will total more than $500 over the coming years.

At the end of the day, it is always best to speak with your insurance agent to determine if filing a claim is the right option for you. Get good advice from your insurance agent. Talk through these scenarios when you purchase your policy. A good agent will want to review your coverage with you annually to make sure that your insurance coverage keeps up with your insurance needs. 

Give us call or start your Allied Insurance Quote today!

By Brian Cook