Have you been in an auto accident or had water damage from the washing machine over flowing? Then got on the phone calling your insurance company for a claim that was only for a few hundred dollars. Did you know you do not have to file an insurance claim every time you are eligible to file.
If you read your insurance policy carefully, you will find you will be penalized if you file to many claims with in a certain period of time. Some insurance companies have been know to raise the premium excessively high or deemed you uninsurable.
Several years ago, this guy took over as director of a small nonprofit. He was a real nice guy with a big heart. He notice three of the five vehicles had small chips in the windshields. Looking over the insurance policy he saw each of the vehicles windshields could be replaced for free. So he contacted the insurance company. Within a week all three vehicles has new windshields.
A couple months later when the annual insurance premium came due, he got quite a surprise. The annual rate went up $525. When he contact the insurance agent, he was told the increase rate was based up the number of claim made in the past coverage period. It was because of the windshield the insurance company felt the need to increase his annual rate.
There is an important lesson we can all learn. Insurance companies don’t like to spend money. They are there if need them. When it comes to filing a claim or not will affect possible rate increases in the future.
In some cases when it comes to small accidents we may be better off just paying for the damage ourselves. Simple things like a busted tail light, or vacuuming up water in the wash room can save you money down the road.
When it comes to determining to file or not to file an insurance claim there is some basic guidelines we can all go by. I found several website with great advice for when it is not good to file a car insurance claim. So I have summarized their advice below with the links below it.
1. Moving Violations - Some insurers rates based on the size or number of claims, while other take in consideration things like tickets. Moving violations on your record already, then filing a claim will assure an increase in rates. If you can avoid filing a claim will definite help you insurance rate.
2. Claim vs Deductible - We all have a deductible. It is anywhere from $100 to $500. This is what we pay before the insurance starts to take over. Now a $250 on a $300 repair is no worth filling that claim. When the cost or the repair is less than the deductible, then you almost certainly will want to not file the claim. By not filing the claim you keep your record as clean as possible.
3. Persistent Problems - Things like termites and mold from water damage can reoccur. A signal claim small claim for a moisture related issue could lead to your insurance company dropping you. Or exclude coverage for any reoccurring moisture related issues.
4. Prevention is Worth a Pound of Cure – Insurance companies like to see prevention, regular maintenance to prevent future payouts. Regular car maintenance and home inspections will often catch a disaster before it happens. Because you are catching the potential problems and getting them fix will definitely lead to lower insurance rates.
I know this landlord who owner several apartments. He has his maintenance crew go around twice a year inspecting for leaky pipes, changing furnace filters and changing outside light bulbs. In addition he asks each one of his tenants if they have any know issues with in their apartment. He says this helps keeps his repair cost down.
5. Don’t Claim when Someone Else Can Pay – Just because someone rear ended you does not mean you have to call your insurance right away and file a claim. Take to the person who rear ended you. He may want to just pay for the damages himself. For minor fender benders this could be a win win for both of you.
Bottom-line: Prevention and knowledge are to of the best ways you can save money. Having a protective/defensive care of your property will prevent a lot of potential problems from occurring. Add to it the knowledge of what to do when anywhere from a minor fender bender to a major disaster can make a big difference. It all goes back to being prepared.
Like I stated earlier below are some links to important information that will help you.
- Tips from the Consumer Federation in its “Guide to Navigating the Auto Claims’ Maze.”
- Five Steps to Filing an Insurance Claim
- State of California Guide to Buying Insurance
- Balance Cost and Coverage
