insuranceDon’t lose your head over small claims, they cost money.
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home insurance

An ounce of prevention isn’t worth an increased premium.

Some people use their homeowner's insurance to fix all kinds of issues around their property. While that's fine, remember that homeowner's insurance is really designed to repair or replace your property in the event of an unexpected major loss.

Filing a lot of minor claims may raise your annual premiums. It's often better to go with a home warranty for smaller issues.

An example of a home insurance claim may be due to a flood in your basement from a burst pipe. Now you'd want to claim coverage for damages to the wall and flooring where water leaked out and other renovation and repair costs. You can also claim personal property loss or damage by the water.

But before you contact your insurance company asking for financial aid, there are some crucial things that you need to consider.

Things to consider 

You have to understand what Insurance premium definition and how it is calculated. The insurance premium is the amount of money an individual or business pay to keep the insurance policy in-forced. It collects into a pool to cover any future payout. At the same time, insurance companies may invest in assets for return but ensure the amount of money in the pool has a certain level of liquidity to ensure they can pay for claims. Insured must understand they are contributing to a pool, much like a lottery concept, except there is no winner but anyone unlucky to have to make a claim. To be fair to every insured and keeping the insurance premium low, the insurance company needs to investigate each claim and decide if they are genuine and a result of accidental causing financial losses to the insured.

Before filing an insurance claim

The first thing you want to do when damage has occurred is to ensure your safety and that of the people around you. You want to prevent the damage from posing a safety hazard. For example, if there is an electrical fire caused by small appliance, you might want to evacuate your loved ones and then completely shut off your home's electrical power supply (if it is not safe to directly disconnect the appliance). You can quickly do this by going to the circuit breaker box and push down the power ON/OFF button.

Then after ensuring your safety, you want to stop the damage from happening further. Sometimes, taking the necessary steps to ensure your safety will also help partly in stopping the damage. For example, if it's an electrical fire, shutting off the main power supply to your home will not only ensure safety, but it will also help partly to stop further damage. Thereafter, if it is safe you can extinguish the fire with an C label fire extinguisher to stop the damage from becoming larger.

Once you've stopped the damage, its time annotate the losses and take a few photos and or record some videos to help strengthen and facilitate the investigation process of your claim. You can electronically record your losses and use your camera or smartphone to get the job done.

Filing an Insurance Claim

- Contact your insurance broker!

After ensuring your safety, stopping the damage from becoming larger, annotating and recording your losses. it will be a good time to contact and give your insurance broker a detailed explanation of the events and a list of all the items that were affected. Now would also be the right time to submit the photos and videos you took to help explain the circumstances.

Another reason you want to contact your broker is so that they can guide you to decide if your case is actually worth the time and effort. Sometimes it's better to let some damages go unclaimed, especially if they are minor. It helps avoid a potential insurance premium increase as said earlier.

Is it Worth the Claim?

So, when is it really worth it to claim insurance?

The answer is when the value of the damage or loss is above your total annual premiums. For example, when your deductibles are $2000 and the damage or loss you've incurred is way above this, it makes financial sense to file a claim. More when you cannot afford to pay anything more above your deductible. If the damage is below the deductible, then there is no reason for you to file a claim.

This begs the question; can you get anything from not claiming insurance for a couple of years? The answer is YES. You will be given a discount on your premiums until you finally file a claim. Many companies will give between 15% and 30% in discounts but it will all depend on the amount of years that you go on without making any claims. So, if it’s not necessary to make a claim it will be beneficial for you to avoid doing so. However, if it’s inevitable we are still here to facilitate you process claim.

What’s Next?

Once you file your claim, the next steps, which will be as follows belong to your insurer;

1. The investigations related to you case will take place

Once your broker reports the claim on your behalf, your insurer will send an adjuster to your place to investigate and determine the amount of damage or loss covered by your policy.

2. The insurance will review your policy

After the officer has completed the investigations, they will go through your policy carefully to determine what it covers and what it doesn't cover. They will then let you know of any damage or loss that is not covered under your policy if there's any.

3. All the damages will be evaluated

The insurer will then hire a relevant professional with expert knowledge to assess the value of the damage or loss and give their opinion. This helps avoid under-compensation or over-compensation.

4. Compensation will be finally pay

Once the company has accurately assessed the cost of the damage or loss, and the repairments are completely done they will disburse a payment that will allow you to pay for everything. The duration in which the settlement of your claim may be made depends on the complexity of the damage or loss.

Overview of the Claiming Process

When damage or loss occurs, there are a few crucial steps that need to be taken before starting a claim process. The steps are; ensuring your safety and that of the people around you, preventing further damage or loss from happening, then noting and taking photographic proof of the event. Thereafter, it's time to contact your insurance broker who will then inform the company about your damage or loss. Once the claim process begins, investigations will start after which the company will review your policy. Next, they will evaluate the damage and finally make a settlement.

Whether you are making a single or multiple insurance filings, knowing these above steps as a client can go a long way in making the process painless for you.

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