“Should I file a claim?” We hear it all the time. It is probably the number one question we here out on the job site. The second most common question is, “If I file a claim, is it going to affect my premium?” Filing a claim can be an anxious and uncertain time for a homeowner that comes at a time that is already filled with stress. Weighing the pro’s and con’s of filing a claim versus paying out of pocket to repair water damage in your home can be extra tough when you are not even sure what the consequences are going to be.
Every insurance carrier is different, but no matter who you are insured with, here are some smart questions to ask before you file a claim:
“When was the last time I filed a claim?” Whether a claim was filed due to property damage, theft or accident, having a claim already on your record will greatly increase the chances of your premiums going up upon renewal, or worse, you could have your carrier non-renew your policy, which will leave you scrambling for new (and most likely) more expensive insurance.
“How long have I been with my current insurance provider?” Regardless of your claims history, many carriers will non-renew any policyholder that files a claim within the first year of coverage.
“What is my deductible?” This can be a huge factor, especially as many carriers are increasing deductibles, sometimes without homeowners even realizing it has happened. We recently did a job for a homeowner who swore she had a $1,000 deductible, only to realize after she had filed a claim that her carrier had increased her deductible to almost $4,000 without her even knowing it. Had she known her actual deductible, she would have chosen not file a claim, but to take a cash-pay discount and keep her claims record clean.
“Would I rather pay now or later?” Let’s say you have $1,000 deductible and a restoration contractor estimates you have $2,300 in damage. Would you rather negotiate a cash price of $2,000 out of pocket, or file a claim, pay your $1,000 deductible and then have your homeowner’s insurance go up $200 a year for five years? In the end, the numbers may be about even, and it becomes a matter of personal preference and comfort.
“Do I plan on shopping for new homeowner’s insurance in the near future?” Once you have filed a claim, you become far less appealing to a new insurance carrier. So, if you plan on shopping for a new insurance provider, be careful before filing a claim. Even one claim can put you in a different risk category, potentially increasing premiums by hundreds of dollars a year.
Also, remember that often times once a claim is filed, it is going to be on your permanent record. “Zero pay claims,” as they are known in the industry, occur when someone files a claim and then receives no payout, either because the claim was denied or because the cost of the repairs are less than the deductible. Even though there was no payout, these “zero pay claims” can still raise your rates and follow you around for up to 5 years. So be careful! Ask your water mitigation company if they offer cash pay discounts or if they specialize in “in-place drying,” which help mitigate your water damages while minimizing potentially costly repairs.
Well, hopefully this is helpful. In a situation like this (as in most situations) I would recommend you call your carrier, ask for their expertise, and find out the nuances of your particular carrier. And, if they aren’t helpful, you can always call SLATE Restoration. Or, even better, call me, Jason Jarvis, owner of SLATE Restoration on my cell phone at 480.495.9622. I would be happy to give you my opinion or answer any questions you may have.