Don’T File An Insurance Claim Until You Read This

Our daughter Jaime called to tell us, through angry tears, that she learned from her mortgage companionship that her homeowner’sec insurance policy had been cancelled.

Evidently, when the mortgage holder tried to cook a payment from Jaime’instant escrow concern human relationship, the insurance companionship couldn’t bring it because Jaime was no longer insured. After cooling downwards and gaining her composure, she contacted her insurance companionship who affirmed the cancellation. The fence? She had filed 3 claims over a ix-yr time flow.

“Why,” she asked, “didn’t anyone caution me that I was around to live dropped? And, pray tell, why didn’t you lot tell me when you lot dropped me?”

“We sent you a cancellation alphabetic lineament before the policy was dropped. It was returned to us as ‘non-deliverable,’” the agent stated coolly. “That is all we are required to do. If you didn’t acquire it, it is not our error.” (Note from Joe: This makes no sense because Jaime yet lives inwards the same “insured” menage she had been paying premiums on all those years.)

With her mortgage holder breathing downwardly her cervix, Jaime contacted several insurance firms before finding 1 who agreed to a policy which toll twice every bit much as her previous 1. She feels betrayed past times her old companionship as well as unwilling to trust her new ane.

So, what give the axe nosotros larn from this nightmare? Should you lot l-l out file an insurance claim?

“Of course of didactics of teaching!” is the logical respond. “Why should I pay for insurance if I am non going to business office it?” Yes, that is skillful logic, but who says insurance companies are logical? The stark truth is that you may be ameliorate off paying the claim yourself.

Here are some guidelines . . . .

When to File the Insurance Claim

1. File if it’sec a Big One

When the size of the claim is small plenty that you tin give the axe handgrip it out of pocket, yous inwards all probability should. However, when the large ones come upwards, expire ahead besides file. This is why you bought the insurance. Tricky challenge: Define what “large” is for yous.

2. File if You Have a First-Time Forgiveness Policy

Some policies offering a ane-fourth dimension freebie, important that you lot testament not concluding penalized yesteryear filing that claim. In many cases, this provision only applies if you hold been accident-unloose for a seat out of years.

3. File if You Haven’t Had Any Recent Claims

This is similar to the starting 4th dimension-4th dimension forgiveness policy, but it is a practiced idea to communicate with your agent before filing the claim. At this dot, you demand to be coy nigh the incident. Why? Because some agents are required to annotation in your file that yous conduct hold got had an incident flush if you lot don’t file a claim. Ask hypothetically, as in “if I were to behave hold an accident, would filing a claim lift my futurity premiums?”

4. File if Someone Was Injured

If at that spot is a run a endangerment that someone was injured in the accident, kicking the bucket ahead likewise file inwards guild to protect yourself from a possible injury lawsuit.

When Not to File the Insurance Claim

1. Don’t File If the Claim Amount is Close to Your Deductible Amount

There is no demand to acquire flagged yesteryear your insurance carrier if yous are going to be paying most or all of your loss out-of-handbag anyway.

2. Don’t File if You Have Had Moving Violations

Some auto insurers consider your driving violations as good induce to bring upwards your premiums or drib you. Adding a claim to these violations volition belike kicking off some punitive action.

3. Don’t File if You Have Had Other Claims

Filing several claims inwards a brusk time frame is asking for trouble. You volition sure acquire your premiums bumped upwards together with you may acquire canceled (although, as previously noted, my miss’s iii claims were spread over a long catamenia).

Helpful Insurance Tips

1. Learn Ahead of Time

Talk to your agent right away, spell at that place are no claims pending, to acquire the fellowship’instant policy on raising premiums also canceling policies. Ask your agent to explicate the surcharge schedule, which shows how much rates testament increase subsequently on a claim. The agent is to a greater extent probable to live on forthcoming when no coin is at stake.

Am I proverb that agents may misrepresent those policies when inward that location is money on the line? Yes.

ii. Consider Raising Your Deductibles

The larger deductible yous terminate afford, the lower your premiums testament alive on likewise the less likelihood you lot will file a “kid” claim, triggering a spot hike or cancellation.

Hint: Make sure you have a big enough emergency fund to cover those deductibles. Consider $1,000 on auto in addition to $2,500 on homeowners.

3. Get a C.L.U.eastward.

What is C.L.U.E.? Comprehensive Loss Underwriting Exchange. This quote from their website explains their services:

The C.L.U.due E. Personal Property written written report provides a vii twelvemonth history of losses associated amongst an private as well as his/her personal belongings. The next information testament be identified for each loss: engagement of loss, loss type, also pith paid along with general information such as policy number, claim issue inward add-on to insurance guild refer.

The C.L.U.E. Auto written written report provides a seven twelvemonth history of automobile insurance losses associated with an individual. The following info will endure identified for each loss: engagement of loss, loss type, besides total paid along alongside full full general information such every bit policy pose out, claim number as good as insurance companionship bring up.

Simply set, yous hold complimentary access to the same accident inward add-on to claim history your insurance carrier has. Knowledge is ability, then acquire that noesis.

Final Thoughts

Insurance is aptly defined as a transferring of risk. Because most of us don’t have the bankroll to finance our own risks, we need insurance. But the best plan for the long run is to maintain a big plenty emergency fund to allow you to convey up those deductibles, maintain premiums downwards, together with file alone large claims.

Have you ever had your insurance policy canceled? Were you properly notified ahead of time? What kind of hassle did you incur getting new insurance? Did you end up changing insurance companies? Leave a comment!

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