Pros and Cons
Understanding the Impacts of Filing an Insurance Claim
We advise our customers to consider the amount of the claim prior to filing it. Often this will require getting preliminary quotes from contractors first. This way, you can weigh it against your deductible to see if it’s worth opening and leaving a blemish on your clue report. If you’re wondering how filing a claim could affect your insurance, this blog post is for you.
What Happens When You File an Insurance Claim?
When you file an insurance claim, you’re essentially asking your insurance company to compensate you for a loss covered under your policy. This could be anything from a car accident to a home burglary or a medical procedure. Once you file a claim, your insurance company will review it and determine whether it’s covered under your policy and how much they will pay towards the loss.
How Can Filing a Claim Possibly Impact Your Insurance?
1. Premium Increases: One of the most common impacts of filing a claim is an increase in your insurance premiums. Insurance companies base their rates on risk, and filing a claim could indicate that you’re a higher risk. However, the impact on your premiums can vary depending on the type of claim, the amount paid out, and your overall claim history.
2. Loss of Discounts: Some insurance companies offer a claims-free discount to policyholders who have not filed any claims for a certain period. If you file a claim, you could lose this discount, resulting in higher premiums.
3. Difficulty Getting Coverage: If you file multiple claims in a short period or one large claim, you may have difficulty getting coverage in the future. Insurance companies may view you as too high of a risk and may refuse to renew your policy or offer you a new one.
4. Deductible Costs: When you file a claim, you’re responsible for paying your deductible, which is the amount you pay out of pocket before your insurance coverage kicks in. Depending on the size of your deductible and the amount of your claim, it may not always be financially beneficial to file a claim.
In conclusion, while your insurance is there to protect you when you experience a loss, it’s important to understand the potential impacts of filing a claim. In some cases, it may be beneficial to pay for minor losses out of pocket rather than filing a claim.
As always, it’s recommended to consult with your insurance agent before making a decision. We can help you understand the potential impacts and guide you through the claims process. At our agency, we’re always here to help answer your questions and find the right coverage for you. Contact us today to learn more!