Your home and auto insurance provides coverage for many different things that could result in financial loss. From liability exposures to physical damages, it helps to know that you are protected against the unexpected. While your insurance has the potential to save you thousands of dollars if you suffer a loss, filing a claim is not always the best choice. Continue reading to find out how filing a claim affects your coverage and how to find out if it’s the right way to cover your loss.
Will Claims Affect Your Rates?
It is very possible that filing a claim will have an adverse effect on your future coverage. In some cases, the consequences are negligible in comparison to cost of the claim itself. This is especially true after a fire destroys a home or in the case where you are sued for injuries you cause in a car accident. On the other hand, filing a small claim could result in rate increases that cost you much more than the amount of the claim. In some cases, it could even result in non-renewal or cancellation of your coverage.
While all carriers are different and you should always discuss the impact of a claim with your independent agent, it is generally understood that the consequence of filing a claim could depend on:
- Your history of prior claims
- The severity of the claim
- The type of claim
- and other factors
You might notice your claims-free discount removed from your premium, or you might face a surcharge for the claim. These changes typically take place when your policy renews. Unfortunately, any claims you make can continue to impact your coverage for years to come. Whether you stick with the same insurer or switch in the future, your claims history can follow you and affect your rates for three, and sometimes as much as five years into the future. Fortunately, an independent agent can help you sort through your options if your coverage is canceled due to claims activity.
What to Do If You Experience a Loss
If you experience a loss, there are a few steps you should take. First, do whatever you can to safely prevent any further damage than what has already occurred. If a water line in your home bursts, for example, be sure to turn the main water line off to prevent further damage. If you are involved in an accident that involves another person, you should call the police so that you have an official report and record of the damages. Next, contact your independent agent as soon as possible.
Should I file a claim? It’s a question nearly every driver or homeowner will face at some point. While we hope you never have to contend with a loss or liability, we also know that bad things sometimes happen outside of your control. In those times, you should not be alone.
As your independent agency, we do more than sell you insurance – we help you navigate your coverage. We offer claims counseling services to help you determine the best course of action for your particular circumstances. We can help you decide whether filing a claim makes sense for your situation, and if so, what you should expect during the claims process.
If you are not yet working with an independent agent, we invite you to find out Philleo Agency Insurance can partner with you to find the right coverage for you. Contact us today for more information about claims counseling or to request your free quotes. We look forward to serving you soon.