The true test of any Insurance Company or policy comes when it is time to file a claim. It’s then that most people realize what exactly it is they are covered for. As agents we try to prevent claims issues before the fact by reviewing the insureds current coverages and suggesting additions or changes. Unfortunately Insurance is price driven by the vast majority of people and sometimes they just go with the cheapest price no matter what.

In this two part blog I will try and unravel the mysteries of both auto and homeowners claims and try to bring some clarity to some common issues that develop when a claim happens. First let’s talk about auto insurance.

I always tell my clients that if all we insured were cars for physical damage then auto insurance would be dirt cheap. Just look at the breakdown of coverages on your policy. The physical car is about a third of the total cost. Everything else is Medical,Liability and if you elect Uninsured Motorist.

Your first duty after an auto accident involving another vehicle is to report the claim to your company or agent as soon as possible. Once this is done the wheels start turning and the insurance company will ask you for a statement as to what happened. These statements are primarily used to gather information but also to make sure that the information on the policy is correct. So if there as an unrated driver or if the car was being used for business, the insureance company can deny the claim for misreprentation.

This is where avoiding problems from the beginning comes in to play for agents and customers.As an agent there is only so much information we can extract from our clients. Like my Dad used to say”We don’t do bed checks” If there are additional drivers or vehicles or if the address or classification has changed then it us up to the insured to notify their agent.

So now the big question,”What happens to my rate if I put in a claim?” The answer is complicated and it depends on what amount the insurance company pays out on your behalf,who was at fault , and how many other claims you have put in during the past 3 to 5 years.Every company has different crtieria so it’s hard to make a blanket statement. Rest Assured the companies look at everything.

The next question we usually get is about deductibles.If you are at fault or the claim is a theft,fire or phyisical damage you’ll have to pay simple. So make sure the claim is worth it. Example you have a $700 fender bender hitting your gagrage door and your deductible is $500..is it really adviseable to put in a $200 claim and risk your rates going up?

The biggest wild cards in claims are attorneys. One can not escape the constant barrage of TV ads and billboards for a multitude of attorneys promising to get you big money. Everyone is entitled to an attorney but remember they can take up to 30 to 40 percent of your settlement.

There are alot of other factors in auto insurance but at least we’ve touched the surface on some main points.

Next we will talk about homeowners claims