Understanding the Impacts of Filing a Claim on Your Insurance Costs and Other Claim Tips

It is amazing to me what options you have when working with your insurance and how personalizable your insurance can truly be if you just take the time to learn your options and ask questions.  The hints and suggestions I’ve provided below are applicable to both home and auto insurance.

Get an Estimate

Begin by finding out what the cost of the repairs is going to be.  You can take the car to the body shop or repair shop or ask a repair person to come out to your home.  This will give you a good basis to go on as only after the actual damage is seen can you really get an idea of what it will cost you.

I have seen where someone describes the damage, and receives quotes of $200 to $1,800!  That was a huge range and really did not help make any type of decision.  So getting the actual estimate is crucial.

Understand Changes to Deductibles, Premiums and Discounts

Next, talk with your agent to find out what your deductible would be if you filed a claim.  You’ll also want to ask what you could end up paying in increased premiums or loss of discounts.

They will often tell you that it is X amount for 5 years.  Be sure to ask if the amount given is per payment or the total for the 5 years.  The agents often think in terms of payment period, so they could tell you that you would lose $200 in discounts for 5 years which means $200 per payment (typically every 6 months for auto and yearly for home) over a 5 year period.

You will then need to take that amount lost times number of payments in a year times years.  In the example of $200, that would end up $1,000 on a homeowner’s policy or $2,000 on an auto policy:  2 X $200 X 5 Years = $2000

They may tell you that your premium won’t increase, but be sure to ask about the discounts as that ultimately does increase your total cost.

Ask Other Questions

I would also ask questions such as what type of claim would this be filed as?  (Collision, comprehensive, etc)  How long ago was our last claim?  How would this affect my driver rating? And if there are any other questions I should be asking?

Get Before and After Pictures

Also, be sure to get pictures of the damage for your records and in case there is ever any question by the insurance company.  You’ll also want to get a few pictures after the repairs are done. The before and after pictures can easily be taken on a digital camera and stored on a computer if needed later.  Keep them even after the claim is done.  Insurance companies often won’t cover further damage unless they know you repaired the previous damage before a second incident.  The repair receipts and pictures would be your proof if you ever needed them.

Keep Good Notes

You will also want to keep good clear notes of who you talked to, when you talked with them, and what was discussed.  This will help you keep an often confusing situation as clear as possible as well as if someone tells you something and goes back on it, you will have the notes to refer back to.

Overall, the key is to remain calm and ask a lot of questions.  Take your time and do not hesitate to ask for a second opinion and clarification as needed.  There’s no such thing as a silly question!

Next week, I’ll be talking about how to prepare for an insurance claim before it happens as we look at the flip side of how to be best prepared before something happens.