Read This First
Things you should know BEFORE you submit your claim
Dear Most Valued Client,
You’re probably reading this because you recently suffered some kind of loss to one of your vehicles, your home or your business. And you’re wondering …
- Should I submit a claim to my insurance company or not?
- Will there be any negative consequences?
- Will my price go up… and if so, by how much?
- Can my policy be cancelled, and what happens when it is?
Those are very important questions. And while every situation is different, I’d like to provide you some inside information to help guide you to your answers. But, admittedly, you can’t get a specific answer to your specific situation in this report.
Why not? Two reasons.
First, there are many factors that determine the true impact of a claim on your policy. For instance…
Each kind of insurance is subject to specific provincial laws and regulations – especially involving cancellation
Each insurance company has its own internal rules and practices
Your personal claims history and circumstances will trigger those rules and practices differently than, say, your neighbor’s.
Second, once you have the facts and know what the impact will be, the decision to submit the claim or not is truly personal. What’s right for your neighbor isn’t necessarily right for you and each of you may make different decisions.
Isn’t This What My Insurance Is For?
Yes, insurance is for paying claims. You elect the protection options and limits you want, you pay your premium, and your insurance company pays your covered claims. That’s the deal; it’s just not the whole story.
Insurance, and the price you pay for it, is based on risk – the risk of a loss occurring. High risk of loss means higher prices are necessary to pay for those increased losses, and low risk of loss means lower prices. Therefore, when you have a claim you now represent a higher risk and pay higher prices for insurance as a result.
What determines the level of risk? Many factors, but claims experience is one of the most important.
The Size of Your Loss vs Claim
If you have a $20,000 car wreck, $50,000 of damage to your home, or $35,000 of inventory stolen from your store, it’s highly unlikely that you would even consider not submitting that claim. That IS what you buy insurance for!
That said, consequences of submitting a small claim may outweigh the money you receive from the insurance company, and sometimes it just makes sense to pay your loss yourself and avoid the consequences of submitting a claim.
Your Policy Deductible
Your deductible has a direct impact on whether you should submit your claim or not. A quick review: Your deductible is the amount you pay out-of-pocket toward the amount of your loss. The insurance company then pays the balance.
What if the loss is just a little bit more than your deductible amount? For example… your deductible is $1,000 and the damage is $1,200? Is it worth getting $200 to suffer the consequences of submitting the claim?
Depending on the type of loss and your personal situation, this claim may cause an increase in your rates, possibly a significant increase. It may cause your policy to be non-renewed.
You may find that once you know the exact situation for your personal circumstances, it’s less costly for you to pay the additional $200 out-of-pocket and keep the claim off your policy.
Did Someone Get Hurt?
Many incidents involve only property damage. However, when someone’s injured it’s never a good idea to keep that to yourself. Why? No matter how minor the injury may be, the injured party can come back and sue you many months or even years later.
If that happens and you didn’t report the claim when it occurred, your insurance company can legally refuse to defend you in the lawsuit and deny any payment as well. Your policy requires you to report your claims promptly so the company can control the claim. If you don’t, they can deny coverage.
So don’t take a risk when someone’s injured and always report those claims.
Company Rules and Practices
Every insurance company is different. They all have their own rules, practices and rate plans… and they all treat claims differently too.
Some companies have a price for just about everybody. That means that no matter how bad your claims record gets they’ll keep you insured. Of course, your price will go up and up to match your claims experience!
On the other hand, some companies don’t have a price for everyone. When your claims record gets too bad, they’ll non-renew your policy (within the circumstances allowed by law). When that happens you’ll be forced to get insurance elsewhere, and it’s likely you’ll pay a significantly higher price with a new company.
Still Not Sure What To Do?
Give Leibel Insurance Group a call! We’re here to advise and counsel you, and to explain how your insurance really works. We’ll give you the facts BEFORE you submit your claim and help you make the best decision – for you.
I've worked with a few of the brokers in the office now, and each and every one of them has provided me with the best possible service. They are helpful, they go above and beyond, and best of all? They are friendly to boot! I won't be finding a new brokerage anytime soon.