Should I file a small property insurance claim?

We consider it an important part of our role as our insureds agent to guide them through the claims process should they ever be in that situation.  A little guidance early in the process can make a world of difference in the outcome for our clients.

When our agency gets a call about a possible minor claim- either a small auto collision, damage to home, etc- one of our first recommendations is to try to assess the actual dollar value of the damage and compare it to the policy deductible assuming it is a covered loss.

If your deductible is $500 and the damage is assessed at $550 it is probably not in your best interest to file the claim to recover $50 and face higher insurance costs for the next 3-5 years that will likely exceed that amount.  What if the damage was $750?  $900? $1,000?  At what point do you decide to file a claim?

In years past it was possible to look at a particular policy and give an estimate of what the dollar impact of a claim would be- be it losing discounts or having a surcharge.  However as insurance companies  develop more complex rating platforms in an effort to come up with rates that more accurately reflect the risk- an unfortunate side effect is that it is becoming increasingly harder to determine the effect of a claim and in many cases even the companies themselves admit it is impossible to gauge the financial effect of a claim.

This extends to automobile comprehensive claims as well- which in the past would not affect the current policy or the ability or cost to purchase new insurance.  This is because companies now utlilize multi-level or tiered rating platforms.  A single comprehensive claim can result in a higher tier and therefore higher cost.

Another consideration in the case of a home insurance claim, if you decide to buy a new house a claim can affect both your buyer’s ability to get home insurance and also the cost of insurance for your new home.  So if you are planning on moving in the near future that may present another variable on a decision to file a claim.

Our advice remains to discuss small claims with your insurance agent and make an informed decision on whether or not to file a small property claim.  Please call us at 215-340-1888 for a free no-obligation review of your insurance policies.

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