Insurance is a funny thing. You pay a small fortune to get it and keep it. Then, if you have the blatant audacity to actually file a claim, the company either increases your premiums or cancels you altogether.
While the world of insurance can at times be so confusing as to be maddening, going without basic property and automobile coverage is simply not an option. The financial risk is just too great. But there are some things you can do to make sure you don’t stand out to the company as an intolerable risk.
Cover the little stuff yourself. Instead of looking for ways to recoup your premium by making lots of small claims, raise your deductibles to $500 or $1,000 and then do not make a claim unless the damage exceeds that limit. The real problem with filing a small claim is that it can count against you if you ever need to file a bigger claim. A good rule of thumb is to not file a claim if the damage is under $1,000.
No injuries? Don’t file. If the incident is your fault and does not involve injuries, then not telling your insurance company will help protect your premium. Your state may require that accidents involving property damage beyond a certain dollar amount must be reported to its department of motor vehicles. Of course you must do that if you’ve crossed the legal threshold. But if the damages are less than say $1,000 and you can swing it, then paying out of pocket will be cheaper than facing increased premiums for years to come. Mishaps reported to your insurer, no matter how minor, become a black mark against your record because it makes you appear to be accident-prone.
Got mold? Tread softly. If you suffer water damage that has even a hint of bringing up the word “mold,” do all you can to not file a claim. Of course you will have no choice if you’ve suffered a major disaster. But if we’re talking about the washing machine overflowing or wet carpet smelling a bit on the moldy side, filing a claim will do more than increase your premium. It could make it impossible for you to buy a policy at all. Home insurers are becoming mold-phobic, and even a phone report that suggests you might have a mold problem goes into a history file tied to you and the property. That could make it difficult to sell the house in the future.
Self-inflicted neglect. Think twice before filing a claim that is the result of your neglect. Most policies won’t cover damage that the insurer determines was preventable if you’d only taken reasonable care to maintain the property in question. Filing a claim will only raise a red flag and add another black mark to your record. While you might think that neglecting things like leaky faucets and roofs will eventually lead to a nice insurance claim that will pay for new carpeting and a complete paint job, think again. You’re asking for trouble if you try to pull a fast one on your insurance company.