Your Deductible

Your deductible has a direct impact on whether you should submit your claim or not.

As a quick review, your deductible is the amount you pay out-of-pocket toward the amount of your loss. The insurance company then pays the balance.

For example, let’s say you suffer $3,000 of damage to your home under a covered claim. And let’s say your deductible is $1,000. In this case you pay $1,000, and your insurance company pays the remaining $2,000.

Clearly, if the amount of your loss is less than your deductible there’s no point to submitting your claim. You’re going to pay it all anyway, so why report it?  For example, if your deductible is $1,000 and your suffer $800 in damages, then your insurance company isn’t going to pay anything. The amount of damage is less than your deductible. You’re responsible for the first $1,000, so you’re responsible for the full $800 in this case.

But here’s where it gets a little tricky.

What if the loss is just a little bit more than your deductible? What if your deductible is $1,000 and the damage is, say, $1,200?  In this case, your damages are only $200 more than your deductible. Therefore, you’ll receive only $200 from the company. Is it worth getting $200 to suffer the consequences of submitting the claim?  It depends. 

And, the kind of loss may dictate whether or not you initially report the claim and then decide to remove the claim.  If it is a water loss and you intend to pay the claim yourself, we recommend turning in the claim simply for notification purposes (that water claim could turn into something much greater after a few weeks or months).

Depending on the type of loss and your personal situation, this claim may cause an increase in your rates, possibly a significant increase. It may cause your policy to be non-renewed.  You may find – once you know the exact situation for your personal circumstances – that it’s less costly for you to pay the additional $200 out-of-pocket and keep the claim off your policy.

The point is … unless you know what the impact will truly be you can’t make a good decision. So, if you’re not sure, get the facts.


Click on a link below to learn more about what you should do before you file a claim.

  1. Damage to Your Property:

  2. Damage to Your Car 

  3. Small Claims:

  4. The Size of Your Loss

  5. Did Someone Get Hurt?

  6. Company Rules and Practices

  7. State Laws

 

 


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