When should I file a claim?

When I first started in the insurance business a wise seasoned insurance agent shared a nugget of wisdom that frankly I will never forget because of it’s simplicity, but also it encapsulates the reason for insurance in one simple statement. Here is what he said

“Insurance is something that should be used on things that are going to ruin your life not your day“.

What makes this statement so true? Many people believe since they are paying for their insurance they need to find a reason to use it. Another misconception is that a insurance policy should be used like a home warranty – something goes wrong, it must be covered by my insurance policy. Unfortunately most people don’t realize using their insurance in the wrong way can actually hurt them in the long run.

Your insurance policy is not a home warranty to be used when things wear out. Nor is it to be used for just anything that goes wrong. So how can using your policy this way hurt you?

• A claim may cause a surcharge on your rates – with some companies up to three years
• With some companies, claims may cause you to be canceled or non renewed
• It will affect your claims history report. This report is much like your credit report – the cleaner the better
• By filing a claim with your current carrier, it may prevent you from being able to move to a different carrier. You ask – “why would I want to move to a different company?” well you may not have a choice if they drop you, or you may want to leave if you receive a rate increase

So when should we file a claim? File claims on things that are going to ruin your life – not the “little” things that would ruin your day. The best way to determine if a claim should be filed is to speak to your agent – they can help you determine if filing a claim makes sense.

If this makes sense to you or maybe you disagree, tell us about it below!

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