It’s the worst of homeowners’ nightmares — coming back to a broken door, and your stuff is thrown around the house. Alternatively, it could be a branch that has been severed off a tree and forced its way into the sitting room via the roof. Either way, it’s in times of adversity that insurance comes in as your messiah.
There are a plethora of plans available for homeowners, each of which has its relevant context. It’s for this reason that obtaining coverage starts with a thorough shopping process, but what should you do after a catastrophe? You’ll probably be surprised to learn that it’s not always in the policyholder’s interest to file a claim.
Why? Because this could sourly affect your coverage and lead to a dramatic rise in your premiums. With that in mind, it’s essential that you assess any situation that seemingly necessitates filing one. For this purpose, there are many considerations you’ll need to go over.
Take stock of Things
It’s important to take stock of the situation before proceeding any further. Start by breathing deeply for a few minutes, after which you’ll have calmed down enough to begin the evaluation.
Take note that you don’t have to put yourself at risk — in fact, it’s recommended to keep the assessment as visual as you can. On that note, anything that might worsen the scenario or expose you to harm should be dealt with accordingly. And if it’s something that requires the involvement of the police (e.g., a burglary), be sure to call them as well.
Chronicle the Situation
Use your phone (or camera, if you have one) to document the loss/damage you’ve suffered at the hands of the event. You’ll also want to outline these items, plus everything else you can recall about the items involved here. This will ensure you’re armed with the evidence you’ll need to submit an insurance claim.
Don’t shy away from noting down all the details, no matter how minor they seem. From there, you’ll want to take a close look at your coverage, so you know what’s included and what isn’t. It’s standard practice for insurers to separate the definitions of flood and water damage in their policies. Besides, coverage comes in levels varying from the most basic to an all-encompassing policy. Not to mention that some forms of damage (e.g., rusted plumbing, that caused by termites, and haphazard events) aren’t usually included in most home insurance plans. Ultimately, the wording of your policy and your evidence are both of utmost significance in the context of making a claim.
Consider the Costs
This will help you know what step to take next. Using the assessment as your guide, try to get a rough estimate of the costs you’d incur by replacing or remedying the burgled/damaged items. You can then compare your deductible amount to the cost of your loss. Common sense dictates opting against filing a claim if the damage is trivial (read less than $1000). This is informed by the fact that most policies set their deductibles at half the said amount. If that’s the case, your compensation will probably be lower than the amount you’d have to pay.
Otherwise, the obvious step to take next would be to file the claim. Ideally, your renewal won’t be affected if this is your first claim in 5 years or more, and the damage is non-deliberate. Even if it makes sense to handle matters on your own, it’s worth reaching out to your insurer nevertheless. This will help you see the event from their perspective with regards to claiming.
What If You’ve Made a Claim Before?
Whether or not you’ve done this before the current event is also a key factor. Sequential claimants are highly unpopular across the insurance industry. This term is commonly used to describe cases where one has filed a handful of claims within a 5-year period. It’s worth stressing that no claim is too small to be considered in this context. As you’ve probably guessed, being tagged as one would make it harder to renew your current policy and obtain coverage in future. This could be by facing filibuster tactics, or a sudden escalation in your premiums.
Make Sure It’s Worth Filing
The lack of concrete evidence or a solid foundation for the claim are both sufficient grounds for its rejection. And even when that happens, the claim will be still attached to your record. In other words, this could come back to haunt you in years to come.
Home insurance, while not being a mandatory element of your ownership, is meant to cater to your interests if you happen to fall victim to a disaster. It’s usually recommended to refrain from filing a claim if the damage isn’t too far-reaching, and you’re well capable of handling the cost. Otherwise, you risk becoming a serial claimant and therefore reduce your chances for qualifying for coverage. You don’t want to be left stranded without it if the future brings along a game-changing event for your life.
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