Masonion contractor, I often hear the question, "When should I file a claim?" My answer for the past 30 years has almost always been the same…"when the financial loss makes sense to file and only after you discuss the decision with your agent".
Making the decision to file a claim is different from one family or business to another because each family or business can stand to incur different levels of financial hardship. There are many factors that go into the decision of whether to file or not and all should be considered, but the bottom line is to only file claims when it makes sense.
Over the past 30 years, due to the increase in catastrophic storm activity, increased frequency and severity of damages, escalating restoration costs, increased operating expenses, state insurance commissioners holding rates down and increased litigious opportunities, insurance companies have struggled to make a profit. This is why most larger carriers have issued "Rate To Consent Forms", which gives them the ability to increase premiums above state approved rates, increase premiums 25% per claim and increase deductibles on demand.
Underwriting departments have become more stringent in what business they write as well as what business they decide to keep on the books. Claims frequency is just one of the many factors that is considered when a carrier decides to non-renew a policy. Agents struggle daily to provide stellar service but when an underwriter decides to drop a policy, there is almost nothing that an agent can do.
Many carriers have opened secondary companies that have more relaxed underwriting guidelines but also come with increased rates, and less TLC services. But for those people with high claims frequency and who have been deemed too high of a risk, their only choice is to purchase insurance through the state Joint Underwriters program. There are almost no "Replacement Cost Policies" with everything being depreciated by IRS approved guidelines and little to no TLC services. As with auto driving points, it usually takes 3-5 years to clear your record and be able to return to a market offering better policies, rates and services.
So….when does it make sense to file a claim? Only when the loss places a challenging financial burden on the home or business owner and only after discussion with the agent.
– Mason Venable, Owner