Insurance Claims and Rate Hikes: Should You File?
When something happens on your property, you likely wonder whether or not it is worth filing an insurance claim. The general understanding is that filing creates a rate hike, and sometimes that hike may price you out of your policy. However, is every claim created equal, and are there ever times that you shouldn’t file?
While a rate hike is likely part of any claims process, a lot of weight is put on the idea of responsibility. For example, if something happens that is entirely out of your control, then the hikes associated with the claim may be minimal. On the other hand, if it is proven that you were negligent, then rate increases will likely be severe because they are associated with the risk you present to your insurer.
Type of Claim
Beyond responsibility, the effect on rates is dependent on the type of insurance claim. For example, there are varying degrees of water damage. A home flood caused by sustained pipe damage is going to cause a higher increase than a sudden burst pipe.
The Cost of Filing
It is important that you consider the cost of filing a claim. Most claims can result in a 20 to 40 percent increase and, depending on your insurer, may stay in effect for two to four years. Also, if the claim is considered high risk, your insurer may drop your coverage, requiring you to acquire high-risk policies.
Should You File
Whether or not you file is entirely up to you. If the damage is your responsibility, meaning you are at fault, then filing could result in the loss of coverage. Therefore, it may be better to resolve the issue on your own by hiring an emergency restoration company in the Seattle,WA, area. However, if the incident is an unforeseen event, then a claim is possibly your best option.
The insurance claim process often causes anxiety because homeowners are concerned with the effect it will have on their policy. However, the crucial thing to understand is that your insurance is there to protect you from unforeseen expenses and disasters, so use it when you need it.