When the time comes to file an insurance claim, you might wonder how your coverage will be affected in the future. Will your rates go through the roof? Will you be at risk of having your coverage canceled? Whether this is your first claim or one of several you have made in the past few years, continue reading to find out how filing a claim could impact your insurance.
Claims Can Make Your Premiums Rise
When it comes to claims, the number of claims you make matters much more than the amount of the claims. Premium increases vary depending on your insurer, your personal claims history, and your state. However, just one claim can void your claims-free discount and result in a surcharge on your premiums. If you have multiple claims in a short period of time – usually 3 to 5 years – you even risk cancellation or non-renewal of your policy.
Of course, there is more to the equation than the number of claims you have; the types of claims you make matter, too. Some claims can have a bigger impact on your rates and coverage than others, such as personal injury liability claims and DUI-related claims. Insurers tend to view these types of claims much more seriously than a comprehensive claim for something like hail damage on your vehicle.
What You Can Do
Fortunately, there are some things you can do to protect yourself. First, take every step you can to prevent losses where possible. This could mean wrapping your pipes more efficiently during winter or putting away the cell phone when driving. While there is no way to prevent all accidents from happening, implementing a few safe practices could significantly reduce your risk of loss or liability.
If you still find yourself involved in an accident or facing a significant loss, determine if anyone else is involved other than yourself. When victims are involved, whether because they were injured or experienced some type of personal property loss, you should always report the incident to your insurance company. This helps protect you in the event you are sued for any liability damages.
Next, ask yourself, “Should I file a claim for this loss?” Just because your comprehensive insurance covers the damage to your car’s paint job does not mean you should use it to repair scratches left in the passenger door – especially if the cost of the damages is less than or not much more than the price of your deductible. Since you will be paying all or most of the repair cost out of pocket, why make a claim that could cost you much more in higher premiums than you will recover in damage reimbursement?
Finally, talk with your independent agent before you make a decision about your claim. Independent agents work for you – not the insurance company. We provide you with personalized claims advice that is specific to your situation. We will walk you through the claims process and help you better understand how filing a claim might affect your coverage and rates in the future. It is the type of one-on-one attention you just cannot get by going online.
If you are not yet working with an independent agent, we invite you to find out what makes us the preferred choice for Elk River area families and businesses. Contact Pentagon Insurance today for more information or to request your free quote. We look forward to serving you soon.
Thom Grubbs is an insurance agent and partner at Pentagon Insurance Agency in Elk River, MN. Outside of work, Thom likes to bowl, fish, spend time with his family, and volunteer at his church. Get in touch with Thom and let him make life a little easier by talking over your situation.