When disaster strikes, it’s hard to remain calm. Very few of us are in the right headspace after a car accident or extreme weather event to even think of calling up our insurance brokers. Thankfully, Excalibur Insurance Group is here to give you some insight into what you should expect when you have an insurance claim to make. We will provide you with everything you need to know on how to file, what you need to file, what to expect from your provider, and what the turnout may be.
It is important to know how making a claim works and what to expect in the unfortunate scenario where you do have to make a claim, especially as this can be a stressful situation to be in – both for yourself and anyone else involved. Let’s begin.
Top Reasons for Claims (as of 2020)
Technically, a claim can happen for any reason – but the most common claims, as of the year 2020, are:
- Wind damage
- Auto theft
Sometimes, claims are preventable. Other times, they aren’t. This is when you’ll thank yourself for having purchased insurance. Now – about that claim…
Reporting a Claim & How it Works
When you report a claim, either to your broker or directly to your insurance company, an insurance adjuster should call you within the following 2-4 hours to ask about all the details of how the incident came to be. Depending on whether you are making a property or auto claim, you can expect the following to occur:
Here is what will happen next in the event of an auto claim:
1. After calling your insurance company, you will be asked to go to a recommended auto body shop to receive an estimate of the damages. If you prefer a different body shop, your insurer will need to send an appraiser to inspect your vehicle and estimate damages.
2. Your vehicle gets repaired – during this time, if you have rental coverage, you can use a rental vehicle while your previous vehicle is being repaired.
3. However, if your vehicle is a write-off, your insurance company will determine an “Actual Cash Value” of your vehicle at the time the loss occurred and send you an offer accordingly. Generally, most providers will allow you to use a rental vehicle for up to three days following the offer but you are not entitled to these days while haggling the offer. If you have purchased a waiver of depreciation endorsement, you may have your claim settled via the actual purchase price of the vehicle and any equipment inside, by the cost of replacing the vehicle with an identical one that is equipped similarly, or by the manufacturer’s suggested market value on the same date as your car was purchased. Generally, your insurer will choose the lowest of these options.
4. Note: if the loss was due to car theft, an insurer will typically wait between 7-30 days to see if your vehicle can be recovered. If it is not recovered, your vehicle’s value will be determined as described above. If it is recovered, the damages as a result of theft will be covered by your policy.
Here is what will happen next in the event of a property claim:
1. An adjuster or contractor (or both) will come to your property to determine the overall damage and take pictures/document the process. Anything you can provide at this time will be helpful in expediting the claims’ process. Consider offering pictures of pre-damage or documentation of items owned, like receipts or otherwise. If your claim is relatively minor, typically only a contractor will come, and an adjuster may handle the other side of things over the phone or by email.
2. The insurance adjuster will review and estimate the necessary damage repairs.
3. If your claim is approved, you can either hire your own contractor or enlist the aid of the insurance company’s contractor. (Note: if you use your own contractor, their quote estimation and scope of work must be identical to that of the insurer’s contractor quote.)
4. If any of your belongings have been damaged, you may need to provide a list of what was damaged with proof via receipts and images. Depending on your policy, you should receive replacement items of similar or identical quality. Once these are replaced, you will receive your reimbursement or the option of a cash-out between 75%-85% of the replacement cost.
5. After repairs/rebuilding has been completed, the adjuster will issue a final payment once you have signed a completion certificate and the adjuster has inspected repairs to ensure they were done up to snuff.
What to Keep in Mind When Making a Claim
Making a claim – especially after a potentially devastating or unexpected loss – is not something we think about right off the bat, but it’s important. In order to ensure things can go as smoothly as possible when making an insurance claim, remember the following things:
- Documentation is important. The more evidence you have to support the fact of your loss, the faster the claims process will go. If an adjuster or a contractor was sent to your home to determine the overall loss, make sure that you show them where every damage is so that it can be recorded, and you get the fairest possible settlement.
- Damages due to a lack of maintenance are not covered. If you have suffered a loss as a result of mould overgrowth in your home causing your roof’s support to weaken and sag, this will not be covered because the damage was due to lack of regular maintenance and inspection. Your policy may cover things like leaking pipes, but it will not repair the pipes that have been corroded over time. As the homeowner, you are expected to regularly look after your home.
- Know your policy. Talk to your broker as much as you can to understand what is and what is not covered. Do not wait until your next renewal in order to make updates – if you need to make changes, let your broker know as soon as possible. Whether you are modifying your vehicle or doing renovations to your home, your broker should be kept up to date. They can inform you of any gaps in your coverage and help you through the claims’ process.
After A Claim –
One of the biggest questions that comes with an insurance claim is: “do my insurance rates go up after making a claim?” The answer is that it depends. Policyholders may have the option of purchasing “accident forgiveness” or “claims protector” which may resist the initial impact of a first claim.
With auto insurance
The younger the driver, the higher the rates. However, after age 25, drivers will begin to see reductions if they have been claim-free since getting their license. Accident forgiveness is a worthwhile purchase, as your driving record and insurance history can be impacted for several years following an at-fault accident.
With property insurance
You may be eligible for a claims-free discount after a period of 3 years with no insurance claims (number varies by provider.) This can be as much as 20% off your premiums. However, if you make a claim, you would lose that 20% discount for the next 3 years.
A broker is your best resource in explaining the claims process, helping you through what to expect during this time, and being there to help you out as much as possible. It is important that you understand the process if you are a first-time claimant. If you have any questions or concerns during this time, get in touch with your broker!