What to Know About ClaimsOctober 14, 2021
How can you know that you have the proper coverage before your policy is tested at the “time of the claim”? And, how do you proceed when a claim has occurred, and you need to report it to your insurance company or insurance agent? It is important to be aware of these things before the smoke begins to rise or the wind blows, or the wrecker is on its way to tow your car. Here’s what know about claims:
Why Do You Buy Insurance Protection?
Generally, there are two major reasons why you buy insurance protection – it is required and for financial protection should something occur.
1. Insurance is Required
The first reason you buy insurance is that someone or some official entity is demanding it, such as the government, or a mortgage company, or other lending institution. For example, You are required by the state to carry auto insurance if you own a car. The bank requires property insurance if you have a mortgage on your home. The lending institution requires physical damage insurance on your vehicle if you have it financed.
2. Insurance Provides Financial Protection When Misfortune Strikes
The second reason you buy insurance is that you understand misfortune can happen, and these events can place you or your family in dire financial straits. So, through the claims process, insurance provides the vehicle to prop up and alleviate financial stress from the loss experienced.
Events such as a house fire, barn fire, place of business fire, auto accident, injury from an auto accident, injury in the workplace, etc. are all events that result in a claim. Sporting events such as snowmobiling, water skiing, church or community softball league are all potential activities with risk.
Because of this, you buy an insurance policy. When you purchase that policy, you are transferring at least part of the risk of loss to a third party – the Insurance Company. You are contracting with the company to assume the financial risk you have as a result of a potential loss to your property or person. It is a contractual agreement to provide protection based on your coverage in the event of a claim.
What to Know About Claims – The Most Important Part of Your Insurance Policy
Insurance policies, coverages, claims, etc. can all get complicated. The last thing you want is to end up needing to file a claim before you have enough coverage or know what your coverage is. Here’s what to know about claims, which, it could be argued, are the most important part of your insurance policy:
1. Your Insurance Needs Change Over Time, And You Need to Review Your Policy Regularly to Make Sure You Have the Coverage You Need
When it comes to claims and your policy, it is important to make sure you understand what your policy provides before you need to file a claim. It is also important to realize that your financial and insurance needs are not static, and they do change with time. Your insurance needs to keep up in order for you to have the right coverage and make sure your claims will be covered; this is one of the most important things to know about claims.
From a property perspective, values of real estate increase; as vehicles age and get more miles, their value may decrease. Improvements to real estate increase value and financial exposure. Families getting larger impact the need for continual financial planning for the event of a disaster. There are also insurance changes when households break up.
Never assume that you have discussed it once and you have “all the insurance you need”! You very well may, but possibly it should be allocated differently in relation to your assets and life stage. It is highly recommended to review your insurance policies and needs with an insurance professional on a regular basis.
2. Perils, Exclusions, and Deductibles Are All Considered During a Claim – Make Sure You Know What They Are
Regularly reviewing your policy with an insurance agent will help you ensure you have the insurance coverage you need. In the event of a claim, there are three pieces of the policy that will come into play – perils, exclusions, and your deductible.
First, what are the perils (causes of loss) that the policy protects against? Examples of perils on your policy could include fire, lightning, wind, vandalism, snow and ice, etc. Second, what is excluded? Exclusions could include war, nuclear disaster, flood, etc. Third, what is the deductible? This is the portion you are responsible for paying out of pocket before the policy pays.
All three of these are defined and listed in the policy forms that are provided when you purchase the policy. Make sure you are familiar with these aspects of your policy. If you cannot find them or are unsure, give your agent a call for an explanation. This is part of why you pay that premium.
3. You Are Responsible For Doing a Few Things During a Claim
When a claim or loss occurs, you expect the insurance company to respond promptly and efficiently. You also have some responsibilities as identified in your policy. For example, you are to take whatever prudent and safe steps you can to limit and abate additional loss to the property. You also need to report the incident to your insurance carrier/company in a timely fashion, in other words ASAP. Typically, the sooner the better.
Scenario #1 – Wind Damage to a Roof
One illustration of things you should do if you have a property claim would be in the event of wind damage to a roof. If shingles are blown off and now rain can enter the dwelling and cause additional water damage, you need to take whatever action is feasible and safe to protect your home from that damage. That may be you stretching a tarp or promptly hiring a contractor to accomplish it. The cost to have this done becomes part of the claim.
Scenario #2 – Auto Accident Involving Another Driver
If you are in an auto accident, gather the information from the other vehicles involved. Your cell phone is a handy tool to record information by prudently capturing images of pertinent documents; licenses, insurance cards, registrations, etc. This will expedite settlement greatly.
When you have an auto insurance claim, you should get the names of the drivers and passengers in the other vehicles and contact information. This usually includes phone numbers, email and address of each, name of the insurance company they are insured through, and a copy of any and all information a police officer is willing to give you if one is present.
As a note, do not admit fault at the scene even if it is blatantly obvious you are the one at fault. This will be established by insurance companies in due time.
Make Sure You’re Covered Before You Need to File a Claim
These are a few important guidelines when it comes to what to know about claims. There are several types of claims; one for every risk, peril, etc. The point is “at the time of the loss is when you really find out just how well your policy has been put together to meet your needs”!
It is never wrong to ask the most elementary or simple questions regarding your policy. What matters is that you understand your coverage and you know you are covered before something happens and you need to file a claim. And, that you have things in place to help prevent your insurance from increasing after a claim.
Your agent is your first source for answers. If you need help discovering what your current policy provides, you may call one of our experienced agents and account managers here at Ruhl Insurance at 800-537-6880 or 717-665-2283.
Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.