Are you not getting the most out of your insurance if you don’t file every possible claim, or are there times when it’s better not to file? You need to figure out what will save you the most money both now and in the future. Keep reading to learn what you need to think about.
Will the Insurance Company Cancel Your Policy if You Make a Claim?
Insurance companies know that some of their customers are going to file claims. That’s the entire point of there being insurance. They’ll rarely cancel your policy for a single claim, but there are a couple of things to think about.
First, how many claims do you have? Insurance companies look back up to seven years, depending on their internal policies. If you have way more claims than other customers, they may decide you’re too risky to insure.
Second, what kind of claims are you filing? The more the reason for the claim is under your control, the more likely it is they’ll cancel your policy. You have a higher chance of having your auto insurance canceled for multiple accidents where you were at fault than you do if you have various claims for rocks hitting your windshield on the highway.
Finally, one severe claim could result in the insurance company canceling your policy outright. This would usually be in a situation where you had a significant degree of fault, such as a pool drowning accident caused by not having the required safety fences. In addition, your insurance company may seek to deny your claim under your policy exclusions.
Will the Insurance Company Raise Your Rates if You File a Claim?
A rate increase is more likely than getting your policy canceled, but it’s still not a guarantee. Again, it depends on how many claims you had and what type of claim. Also, you may have discounts on your policy for having a claims-free history that you’d lose even if you wouldn’t see a rate increase as a line item in your quote.
If you do see a rate increase, it will usually stay in effect as long as the insurance company looks back to old claims. Again, this could be between three and seven years in most cases. However, the increase may get smaller over time, as the insurance company may put more weight on more recent claims.
What is Your Claim Worth?
You should also think about what your claim is worth before you file. If you have a high-deductible home insurance policy and have storm damage that’s $500 more than your deductible, you may want to skip filing the claim to preserve your claims-free history. It’s possible that filing the claim could cost you more than $500 in extra premiums over time, especially if you have additional claims you need to file. Exactly where the line is, depends on your financial situation and risk tolerance.
How Can Your Insurance Agent Help?
Your insurance agent can help you figure out what a potential claim is worth and the impact of filing a claim. Talk to Frangquist Insurance Agency today.