HOW DO YOU KNOW IF YOU SHOULD FILE A HOMEOWNER’S
INSURANCE CLAIM?
“That’s what insurance is for” is what
you hear many people say, but do you really understand when you should file a
claim and when it’s really not in your best interests? Many consumers feel that
they pay a monthly premium so they are entitled to something. This is true in
some aspects, but there are deciding factors as to whether or not the insurance
company will cover the loss you are claiming.
Up
to Date
“I’ve been a customer for 20 years”! It
does not matter how long you have been a customer with your insurance carrier
if your payments are not up to date. Your insurance company does not have to
cover your loss if you have fallen behind on your payments.
Underinsured
If you are underinsured your insurance
company does not have to pay the difference in cost to cover your repairs. Your
insurance company will only pay for the coverages that are stipulated in your
policy. If you do not have a backup of sewer and drain endorsement or flood
coverage your insurance company does not have to pay for water damage resulting
from a sewer back up or a flood. Your insurance will not exceed your policy
limits. If it costs fifty thousand dollars to replace all of your contents but
you only have coverage for twenty thousand dollars then you are responsible for
the difference.
Cost
and Your Deductible
If your damages do not exceed your
deductible your insurance company will not cover your loss. It is the policy owner’s
responsibility to cover his/her insurance deductible before the insurance
company pays out any money for the loss that occurred. This is sometimes paid
directly to the contractor handling the repairs or it can be withheld from the
insurance proceeds that are paid out by the insurance company. All costs must
be factored in when deciding to file a claim: mitigation, damaged contents,
cleaning and structural repair. If your
repairs cost less than your deductible it is not in your best interests to file
an insurance claim since it will not be covered.
High
Claim History/C.L.U.E. Report
If your loss will cost slightly more
than your deductible you should still take your claim history into
consideration before filing a claim. Even if your claim should be covered by
insurance, you run the risk of seeing another rate increase or even being
dropped by your insurance company. Insurance companies use claims and inquiries
into the 1-800 number hotlines to determine what customers are at risk. If you
are a high risk, meaning you have numerous claims or unpaid claims, then it is
not in their best interests to insure you. Customers that are labeled a risk
will cost the insurance company money. Insurance companies record and share
your claims history using the Comprehensive Loss Underwriting Exchange (C.L.U.E.).
Even though you called the 1-800 number to ask a question they are still
pursuing your inquiry as a claim that is being filed. It is recommended that
you seek advice from your insurance agent or Rainbow International before contacting the 1-800 number.
Maintenance
Many homeowners’ claims are often denied
because they are considered maintenance as opposed to damage stemming from a
direct peril. If you haven’t addressed your roof in 30+ years and it is now
missing many shingles and water is leaking in you may want to think twice about
filing a claim. You will most likely be told that your damage is due to wear
and tear and it will not be covered. This scenario is different than finding you
are missing shingles and water is now leaking in because a tornado came through
and ripped them off. It is your responsibility to maintain your property to
prevent damage.
Scams
It is not stated in your insurance
policy that they cover stupidity, but accidents do happen. Many insurance scams
are often caught so it is not worth trying to get one over on your insurance
company. Claims that have slipped by only cause you and others to see a rate
increase over time. Your insurance company may cover your fire loss if you
accidently knock over a candle and it catches the house on fire but if they
find that you intentionally started the fire then you have a lot more to worry
about then your claim being denied. Insurance is not free money. Even if you
receive money from your loss you will still find that depreciation is withheld
from the insurance proceeds. You will have a house and contents that are
destroyed and in need of repair, you will be inconvenienced until the repairs
are complete, your insurance premium will dramatically increase or even worse,
you will be dropped by your insurance company. Insurance adjusters are
specially trained to detect real damage from intentional damage so it is not in
your best interests to try and scam your insurance company.
There are many
factors that you have to take into consideration before making the decision to
file an insurance claim. Many consumers hurt themselves by filing a claim for
every little thing that happens to their property. This scenario is similar to
the boy who cries wolf. If you try to file claims for every little thing then
your insurance company is not going to want to hear it when it comes time to
address the real property damage at hand. Keep in mind that property damage is
unpredictable. Be happy that you have never had to file a claim and see a rate
increase or risk being dropped. Analyze the aforementioned aspects and proceed
in filing a claim if every category has been thoroughly considered.
Rainbow
International can assist you by providing you a free property damage inspection for any type of fire, smoke, water and mold damage. Contact 708-460-0911 to set up your free
inspection.
