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It’s time to replace that broken window in your kitchen or the relatively small dent on your car’s bumper. Does it make sense to call your insurance company and file a claim or is it better to pay for the repairs yourself?
Accidents happen all the time. And insurance exists to help cover the costs of these accidents.
But not all mishaps should be submitted to your insurance company. In some cases, it’s best not to file a claim – especially if the price of the repair is relatively small.
People who file frequent claims can see their premiums rise dramatically or even face the cancellation of their policy.
And it’s not just the claims that are paid that are the problem. You also can get penalized for a claim that’s been denied or one that was just a question to your agent.
Let us explain. Insurance companies keep track of your history and look to it for guidance on their pricing and whether they will continue to insure you. If you’ve submitted five claims in two years, your premiums will probably be astronomical or the company may decide to cancel your policies entirely.
If you have a $900 repair, you’d probably be better off paying for it out of your own pocket. Chances are that $900 is less than your deductible anyway. And if you file too many of those small claims, you are looked at as a risk.
Granted, there are some insurance companies that will give you a pass on your first claims. But it is best not to get into the habit of calling in claims for every little incidental that happens with your property.
One or two claims over a 10-year-period will be okay, but more than one or two in a three-year span will send up red flags.
Here are some basic facts to consider:
- When you file a claim, whether it’s a new roof or one new window, it will stay on your insurance record for at least three years.
- If you file a claim for something that isn’t covered, the claim will not go away. So make sure you are covered for the item before you file a claim. And if you ask your insurance agent about a possible claim, talk about it in theoretical terms so that a file is not opened and placed into your record.
You can get some insight into your personal history by requesting a free copy of your report from the Comprehensive Loss Underwriting Exchange (CLUE) – the same place where insurers go to review your history of claims, including all personal property and auto claims that you’ve made. It’s a good idea to check CLUE periodically to make sure your information is accurate.
Another great idea is to call your insurance agent if you are thinking about filing a claim that you aren’t sure about. At Insurance Advisors, we’d be happy to talk hypothetically about your situation so it’s not put into your file. We can be reached at 720-210-9898.
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