If you dutifully pay your annual home insurance policy, you may believe that when an accident occurs, claiming should be a simple procedure. Unfortunately, this is not always the case. If you have a policy and disaster does strike, proper consideration is needed before a claim is made. Some claims may result in the cost of your premiums rising, whilst others may result in your policy being terminated.
Being the holder of a home insurance policy does not mean a claim should be made the instant damage occurs. It is more realistic to say that if there is damage, a calculation should be made. The result of the calculation will indicate one of the following:
- Whether it would be financially beneficial to make the claim
- If it would be financially beneficial to absorb the cost
To make the calculation a repair estimate of the damage and the amount stated on the policy as the deductible is needed. If the deductible exceeds the cost of the damage, claiming would not be of benefit to you. It may result in a loss. In a case like this, a claim should be avoided. Avoiding the claim then works as a positive, as your record is kept clean, reducing the chance of the policy’s premium costs being raised. A claim should be made however, if someone is injured on the property. This in turn will safeguard you if an injury lawsuit is filed.
Even if repair costs exceed the deductible, there are still some claims that should be avoided. Water damage claims are an example. These claims may result in policies being cancelled at the time of renewal. The insurer will now see the property as one being susceptible to mold. This may not be the case with every insurer, but it should be noted. If a claim for water damage is made, it should exceed $10,000.
As every claim has the potential of raising premium costs, non-water damage claims should not be for a low repair cost either. They should, at minimum, exceed $3,000. Remember that a low amount claim could result in the cost of your policy going up and exceeding the amount that you claimed for in the first place. Also keep in mind, that every claim is recorded in the Comprehensive Loss Underwriting Exchange which is used by all insurers. Even if you change insurance companies, information about old claims will still be accessible on the database. This in turn could mean that you are never offered a reasonable costing policy again.
Home insurance, even though essential, is sadly not as straight forward as you may expect. Multiple claims will result in premium rates being increased and some policies being terminated, this in turn negatively affecting the security of your home and your finances. For more information on obtaining the right home Roanoke home insurance policy for you, contact Carlton Wright Insurance Agency, Inc at 800-700-6873.