Claim free protection will keep your rate low on accident
Claim free protection will keep your rate low
Do you actually understand how insurance claims work? Do you know about the consequences or good things about claiming for insurance? Or do you even know when it is okay to claim for insurance? Before you want to start saving on insurance rates, you will need to understand a little more about insurance claims. Fortunately for you, we are here to help you!
Insurance Claim is?
When you claim insurance, you will contact and request your insurance provider to cover a specific damage or loss that your property has incurred. Before approving your claim, however, the insurance provider must investigate and validate the claim to confirm that the loss is the result of a risk covered under your policy. You will most likely be required to provide evidence and documentation of the losses or damages so be prepared as this might help accelerate your claiming process.
When to Claim?
It is only worth submitting an insurance claim when you know that it is valid and meets your specific insurance policy requirements. For instance, you will only want to claim damages covered under your policy and that exceed the deductible you need to pay before your insurance takes over. For example, you might claim insurance when your roof gets damaged by hail if this is covered under your policy and the damages exceed your deductible of $ 2000. However, you shouldn't try to claim for damage that doesn't even exceed the deductible you need to pay to your insurance because your insurance will most likely reject the claim. If your claim ends up being approved, then the insurance company will ensure that you neither incur losses or profits from the event. The insurance shall do this by covering for the incurred damages fairly and to the extent stated in your policy.
Insurance rate refers to the amount of funds required to effectively cover losses and expenses while providing a certain profit to the insurer. An increase in the number of claims consequently increases the rate of the insurance premiums.
One could reduce premiums insurance rates by asking for higher deductibles and comparing various companies' insurance costs before adopting certain policy. In addition to this, you can also take full advantage of claim-free discounts and maintain an excellent credit record.
Positive side of claiming
The clear and relevant importance for claiming insurance is the imminent payment of losses incurred. You will feel secure and have a peaceful state of mind because you will be able to recover your essentials, thereby relieving you from the financial stress of replacing them.
Unexpected expenses due to damage or losses could be a burden to individuals who will have to use their income to cater for them. Claiming insurance, on the other hand, will not suddenly impact one's financial life. For instance, claiming will indeed increase premiums on your policy, but that is still better than making a direct payment all at once.
Negative side of claiming
One of the most common consequences of failing multiple or costly claims is the possible increase in your insurance premiums or rates. Moreover, your insurer might also deem you high risk due to too many claims, which can either increase your rates upon renewal or cause coverage policy denial. In this situation, it will also be hard to find another insurance company willing to take you in. Therefore, we recommend to the policyholder to only file necessary claims. For instance, you will want to file for claims that you absolutely cannot cover and go beyond your financial means. However, if the damages are minor, easy to fix and barely reach the deductible amount you need to pay, then you might also want to pay for the repairs or fix them yourself.
Furthermore, there are times when it is not advisable to file for an insurance claim, especially when you know the cause of the loss is not directly related to any coverage under your policy. If you lie to insurance companies, you will be committing insurance fraud, and you could be denied coverage or even face fines and penalties.
Saving on Insurance Rates.
After making a claim probably, your insurance rate will hike. However, it may not hike if you have claim forgiveness added, or it depends on the insurance policy terms and conditions.
Claim Forgiveness is merely a forgiveness card for a first-time insurance claim on either a house or a car incident. Typically, you can incur this protection if you haven't had any claims for a specific period of years. However, since guidelines and requirements for claim forgiveness vary among insurance companies, you should first consult your respective insurer about their claim forgiveness policy.
When you are at fault in car accidents, claim forgiveness protection can allow you to get away with it because it is your first accident. Luckily, the driving record will remain intact, leaving you with no increased charges in the value of your premiums. Similar guidelines might apply when you claim forgiveness protection for your home insurance and incur your first-time losses. Having claim forgiveness can save you a big-time from increased premiums, so make sure to consult your insurance about the requirements needed to obtain this coverage.
Prevent Rising Premium Fees
Nothing is more uncomfortable than receiving emails alerting you about an increase in your insurance rates. However, you can prevent this by employing the following tips:
- Pay your loans, tax and insurance on time. The significance of paying your dues on time helps to improve your financial credit score, which attracts lower premium rates because of your good paying history.
- Minimize the number of claims. It is significant to think twice before you file for a claim. For instance, do not file for a claim if the damage is worth catering from your pocket. Filing for unnecessary claims will make the insurer rank you among the high-risk clients, thereby increasing your premium fees.
- You may increase your annual deductibles. Increasing your yearly deductibles can lower the premium fee.
- Insurance companies reward loyal clients with discounts and loyalty programs which will help reduce premium fees.
- Seek claim forgiveness protection to protect your premium rates from increasing if you file for a first-time claim.
Claim Free Discount
These are discounts given by insurance companies to customers that haven't placed claims to their insurance policy for a specific period, often five years. In most cases, these customers can get a percentage discount on their car insurance premiums. Still, this percentage will depend on your specific insurance and the number of years you go without a claim. These discounts, however, are only effective as long as you don't incur any accidents or claim for losses. For instance, the insurance price of a car could be reduced within five years if the vehicle is not involved in an accident and no claim is made. For example, a customer might receive a no-claim discount of 20% from her comprehensive car insurance policy for not filing for a single claim and not receiving speeding tickets for the past five years. Depending on the customer's insurance policy, the discount can keep going up until it finally reaches the policy discount limits and as long as the customer keeps her/his records with zero claims.
No-claim discount worth protecting?
Whether it is a discount for not claiming any accidents for your home or car, the discounts might keep increasing annually, saving you a good amount of money in the long run. Some insurances offer better no-claim discounts than others, but it is always wise to consult with your specific insurance about their discount rates and not let them go to waste. For instance, if you used to pay $120 for a monthly premium on your home insurance, upon receiving your first no-claim discount of, let's say, 20%, you will now be paying $96 per month. Depending on your insurance company, these discount rates might keep going up if you maintain a clean sheet with no claim history.
The knowledge of the insurance claiming principles enables one to make a comprehensive and efficient decision regarding claims. Remember, it is always essential to consult with your respective insurance to verify any different or additional policies regarding claiming insurance. If you have more questions about the insurance claiming process, don't hesitate to contact us.