You’re probably reading this because you recently had a car accident or suffered some other kind of loss to one of your vehicles, your home or your business. This is where we want to be there for you….
And you’re wondering…
- Should I submit a claim to my insurance company or not?
- Will there be any negative consequences?
- Will my price go up? By how much?
- Can my policy be canceled… and what happens then?
Those are very important questions. And while every situation is different, I’d like to provide you some inside information to help guide you to your answers.
Let us help you with those questions, and help demonstrate the value of a local agency you can just reach out and contact. Contact us today in whichever manner you prefer, whether it's a call, text, or email.
Ready to file a claim?
As your independent agent, we’ll do our best to make your claim experience a smooth one.
- To begin, please contact the insurance company directly to put them on notice of the claim. We will then be notified of your claim by the insurance company.
- If you have a claim and would like our assistance, we will be happy to speak with you. In most cases, you will need to speak directly with the Insurance Carrier to report the details but we can help to make sure that your claim is processed correctly.
- After your claim is processed, we will follow-up with you to ask about your experience and make sure you were treated well.
If think you’re not being treated fairly, need some help along the way or want to share your positive experience with us, just let us know! We’re always here for you.
Things You Should Know BEFORE You Submit Your Insurance Claim
First, there are many factors that determine the true impact of a claim on your policy, we really don't plan to go thru all of them here. However, once you have the facts and know what the impact will be, the decision to submit the claim or not is truly personal. What’s right for your neighbor isn’t necessarily right for you. Given the same facts you each might make a different decision.
The bottom line is this…
If you’re concerned about the potential impact of submitting your claim, contact us and let us help you, remember we are here for you. This is just one of the many benefits of doing business with a local agency like us!
Isn’t This What My Insurance Is For?
Yes, insurance is for paying claims. You elect the protection options and limits you want. You pay your premium. Your insurance company pays your covered claims. That’s the deal.
Then why all this talk about the “consequences” of claims? Why can claims increase my price or even get my policy canceled? That’s what insurance is for!
That’s absolutely true. It’s just not the whole story. It would be quite lengthy to go through all the in's and out's of how insurance rates and works, and most people don't want to read all that!
In short, one significant factor in insurance rates is level of risk – the risk of a loss occurring. Basically, higher risk = higher prices.
Now, what determines the level of risk? Lots of things. But claims experience is one of the most important.
Another significant factor in rating is statistics, with that in mind people who have a claim are more likely to have another claim. So, when compared to someone with no past claims, someone with claims on their record represents a higher risk of loss to the insurance company and therefore, higher rates.
This allows the company to keep prices lower for people who represent lower risk.
Insurance companies doing business in Washington State have to have their rating filed and approved by the commissioners office. Rest assured, insurance rates aren't a "personal" attack although it can often feel that way.
The Size of Your Loss
Really, this discussion about whether or not to submit your claim really only comes into play with small losses; losses that come close to your deductible.
Clearly, if you have a $20,000 car wreck…or $50,000 of damage to your home…or $35,000 of inventory stolen from your store, it’s highly unlikely that you would even consider not submitting that claim. That IS what you buy insurance for!
On the other hand, small losses can sometimes hurt worse by submitting them. The consequences of submitting the claim may outweigh the money you receive from the company.
Sometimes it just makes sense to pay your loss yourself and avoid the consequences of submitting a claim.
Your deductible has a direct impact on whether you should submit your claim or not.
A quick review… Your deductible is the amount you pay out-of-pocket toward the amount of your loss. The insurance company then pays the balance.
For example, let’s say you suffer $3,000 of damage to your home under a covered claim. And let’s say your deductible is $1,000. In this case you pay $1,000, and your insurance company pays the remaining $2,000.
Clearly, if the amount of your loss is less than your deductible there’s no point to submitting your claim. You’re going to pay it all anyway, so why report it?
For example, if your deductible is $1,000 and your suffer $800 in damages, then your insurance company isn’t going to pay anything. The amount of damage is less than your deductible. You’re responsible for the first $1,000, so you’re responsible for the full $800 in this case.
But here’s where it gets a little tricky.
What if the loss is just a little bit more than your deductible amount? What if your deductible is $1,000 and the damage is, say, $1,200?
In this case, your damages are only $200 more than your deductible. Therefore, you’ll receive only $200 from the company. Is it worth getting $200 to suffer the consequences of submitting the claim?
It depends. It depends on what those consequences are!
Depending on the type of loss and your personal situation, this claim may cause an increase in your rates, possibly a significant increase. It may cause your policy to be non-renewed.
You may find – once you know the exact situation for your personal circumstances – that it’s less costly for you to pay the additional $200 out-of-pocket and keep the claim off your policy.
The point is… unless you know what the impact will truly be you can’t make a good decision. So, if you’re not sure, get the facts. Let us help.
Did Someone Get Hurt?
Many incidents involve only property damage. For example, maybe the wind blows some shingles off your roof. Or perhaps you back into a pole in a parking lot.
The point is nobody’s hurt. There are no injuries.
When your loss involves property damage only, it sometimes makes sense to take care of it yourself and avoid the consequences that come with submitting the claim. You pay for the damage and it’s over.
However, when someone’s injured it’s never a good idea to keep that to yourself. Why?
Because no matter how minor the injury may be, the injured party can come back and sue you many months or even years later.
If that happens and you didn’t report the claim when it occurred, your insurance company can legally refuse to defend you in the lawsuit and deny any payment, as well.
Your policy requires you to report your claims promptly so the company can control the claim. If you don’t, they can deny coverage.
Defending yourself in court is expensive – even if you win – so don’t take a risk when someone’s injured. Always report those claims.
Company Rules and Practices
Regardless of what TV commercials try to tell you, every insurance company is different. They all have their own rules, practices and rate plans. And they all treat claims differently, too.
Some companies have a price for just about everybody. That means that no matter how bad your claims record gets they’ll keep you insured. Of course, your price will go up and up to match your claims experience!
On the other hand, some companies don’t have a price for everyone. When your claims record gets too bad, they’ll non-renew your policy (within the circumstances allowed by law). When that happens you’ll be forced to get insurance elsewhere, and it’s likely you’ll pay a significantly higher price with a new company.
I can’t emphasize this enough… there are no clear-cut guidelines for making this decision. State laws, company rules and practices, the size of your loss, your deductible and your personal claims history and experience all mix together to create your unique circumstances.
If you’re wondering whether or not it makes any sense to submit your claim, give us a call FIRST. Get the facts for your specific situation and then make an informed decision.