Don't claim the small stuff
To claim, or not to claim? That is the question.
You got into a fender bender or backed into a pole. There’s mold in your basement or the bathroom overflowed. No matter what your policy limits are – even if you’ve got plenty of coverage – you’re unsure if you should make a claim or just repair the damage yourself. Consider the following before making your decision:
- Know claims facts. On average, car owners file a claim every 17.9 years. Auto insurance underwriters will consider anyone with more than one incident in a three-year period as having “multiple claims,” which could affect your premium, or could send you looking for a new carrier. A typical homeowner will make a single personal insurance claim every 10 years, and underwriters are not as likely to take a risk on a policyholder with more.
- It’s just you. If the mishap involved only you and your car, or involves only a minor home repair, get an estimate first. If the cost to fix is less than your deductible, then take care of it yourself. If it’s more, consider whether the insurance payout now is worth the risk of a potential rate increase later. Auto and home insurance rates will go up when multiple claims exist and typically linger about three to five years before they gradually decrease again ‑ assuming you don’t have any more claims during that time.
- It’s more than just you. If your damage exceeds a couple of thousand dollars, you are clearly at fault or the mishap includes multiple vehicles, homes, etc., you’ll want to make a formal claim. In addition to the financial expense of the repairs, overseeing all the details and estimates of multiple claims can be extremely time-consuming. Your broker has claims experts who specialize in coordinating multiple claims. With HUB SmartCoverage, for example, special claims counselling is available where you can work with a broker to make the decision of whether it’s worth it to make a claim. Even better, the discussion won’t affect your record.
- Consider what you don’t know. Whether it’s just you or multiple drivers or homeowners involved in the mishap, the damage could be more serious than it appears at first. Similarly, injuries can sometimes surface only after an incident. Without your insurer involved, such liability could be financially crippling. If you are going to make a potential claim, your broker or carrier likely has deadlines for notification. Don’t delay.
What to do if you don’t claim: If you decide you don’t want to make an insurance claim, there are still a few things you need to do just in case the situation escalates later. First, make sure to take photos of the damage done to both cars, and the area of the house that’s in question, before beginning repairs. In the case of a car accident, call the police to the scene or go to the local station to file a report. Both will provide important documentation.
At the end of the day, you’ll want to report the majority of accidents you may experience to your insurance company, just to be on the safe side. If the accident caused $2,000 or more of damage in total (all vehicles involved), there’s an injury, or there’s suspicion of impaired driving, then failing to report it will violate the law.
At renewal time: Whether you file the claim or not, use your annual renewal to freshen up on your policy requirements and coverage limits, understand your deductibles. That way you’ll have a better idea of whether you should make a claim or fund the repairs yourself if the situation arises.
Multiple claims may also exclude coverage or limit coverage amounts. It’s important to understand when it makes financial sense when to make a claim. Finally, it’s critical to know your policy and its limitations... before you need to make a claim. A broker can help you review so there aren’t any future surprises.
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