We are currently working with a client who has had some bad luck with claims recently. He had a jewelry theft in 2011 for $5,000, a roof leak in 2010 for $400, and a hot water tank bust in 2009 for $2,700. When you first look at this, it doesn't seem too bad since they were all relatively minor, BUT now his insurance company is cancelling his policy due to the frequency of claims. The average homeowner makes 1 claim about every 8 years. With this client having 3 in the last 5 years, he now doesn't meet the carrier's eligibility guidelines. Had his agent advised him on how filing claims not only effects his rates but also effects his insurability, my client wouldn't have been put in this unfortunate position. If he would have paid the $400 claim out of pocket, his insurance probably wouldn't have been cancelled. The general rule of thumb is you are allowed one claim every three years, BUT every company is different. Two would have been easier to work with than three. He is now paying 4 times as much as he was before... that little $400 claim ended up costing him $1,800 per year!
Below are some tips if you think you might have a claim:
1. Insurance companies tell customers to inform them of a loss as soon as possible, but that window of time is usually about 30 days. Though you want to act quickly, it's usually a good idea to find out what the value of the damage is before you talk to the insurance company. We've seen instances where people are penalized for inquiring about a claim, even if they don't make a claim.
2. I usually don't recommend filing claims for under $1,000. But, if the claim involves another party and there is potential for a lawsuit, it's wise to let your insurance company know right away. You might think your dog's bite or a fender bender was minor, but it could lead to something major. You want your insurer on your side in a lawsuit, even if it means paying higher premiums down the road.
3. If the loss is related to a maintenance issue, such as a chronic leak or a few missing shingles, you probably don't want to file that claim.
4. If you have had a claim in the last three years and the damage isn't too bad, you are probably better off to pay for it out of pocket.