How do you determine if a claim should be submitted?
Are there any injuries?
If someone has suffered an injury, no matter how minor, you absolutely need to file a claim. This is because the injured party could come back and sue you later. If you don’t report the claim the insurance company can legally refuse to defend you in the lawsuit and deny payment.
Amount of damage
The first thing we look at when we know the amount of damage is the deductible. The deductible is the amount of damage you have agreed to absorb on your own. For example, you suffer $7500 in hail damage to your home and you have a $2500 deductible on the policy. You would pay the first $2500 and the insurance company would pay the remainder. In this example most people would proceed with submitting a claim.
But what if the damage amount was only $2800? In that case you would pay $2500 and the insurance company would only pay $300. In most cases it would not be worth pursuing a claim as the potential impact on the policy’s premium would be greater than the amount the insurance company paid out on the claim.
How will it affect my premium?
When the insurance company pays out a claim on your behalf your policy may be adjusted to reflect the claim. Your driving record could be downgraded, you could lose a claims free discount, or perhaps have a claim surcharge added to your policy. As your broker we weigh the cost of the claim versus the impact it has on your policy to help you determine what the best course of action is.
Can they cancel my policy for making a claim?
This varies between insurance companies. Each company has their own rules and practices and they all handle claims differently.
Some companies will continue to insure you regardless of how bad your claims history is. The premium will increase to match the claims frequency.
Other companies however do not have a price for everyone. If your claims record worsens significantly enough they will look for options to lapse your policy (within circumstances allowed by provincial law). A replacing policy will then have to be found, often at increased costs.
The province imposes laws to protect you, the consumer. Those laws define the circumstances under which the insurance company can cancel or non-renew a policy. Depending on the type of policy, these laws may provide you with a great deal of protection or very little.
Personal automobile insurance is the most protected under the law. The insurance company cannot cancel or non-renew a policy simply because they don’t want to insure you any longer. The law states the conditions under which the insurance company is allowed to cancel or non-renew a policy.
Other lines of business like home insurance and business insurance have fewer defined regulations. In these cases the insurance company may have the option to non-renew your policy.
The important thing to remember is that as a broker we work for you, not the insurance company. We are here to help you. We can review the above concerns and help you determine the best course of action for your unique situation.
We recommend that all claims be reported to our office to discuss your options. However we realize that’s not always an option. Below is the emergency contact information for all of our insurance partners: