Knowing when to file an insurance claim

http://www.chicagotribune.com/classified/realestate/sc-cons-0624-karp-spending-20100624,0,2398284.story

By Gregory Karp, Spending Smart, Tribune Newspapers

June 28, 2010

Things you should know

It would be easier if consumers could rely on a specific formula to determine whether they should file a claim — comparing the amount they receive from a claim versus their expected rise in premiums over the next few years. Unfortunately, it's not that easy because insurance rates have so many moving parts.

Be cautious about calling your agent. If you're uncertain about filing a claim, don't impulsively pick up the phone to talk with your agent. Some agents are obligated to note in your file that you had an incident, even if you never file a claim. That alone could increase your rates, said Joel Ohman, a Certified Financial Planner and the founder of the rate-comparison site

InsuranceProviders.com. "That's good to know before you start blabbing away about things, not knowing it might unintentionally raise your rate," he said.

However, your agent is also the best person to help you evaluate your options, said Hubbard of State Farm, so talk to your agent about the insurer's practices.

You may want to raise your deductibles. It's generally unwise to make lots of small insurance claims. So you might as well raise your deductibles and pay lower premiums. A suggestion: $1,000 on auto and $2,500 on homeowners.

we passed:(

and it only coverss total destruction of the property.

But I sure as hell wouldn't want to be without it because it does pay 90% of the reconstruction costs. And that is a lot better than owing the bank $300,000 for a pile of rubble.

And his house had never been flooded. It came in handy when his house was flooded from hurricane Ike. His homeowners and flood insurance allowed his to get a a new house (well, he had the same windows and outside exterior, but the inside had been stripped down to the studs).

for filing two small claims within 3 years. Liberty Mutual canceled my policy after paying out $1200 in total for both claims. I had to go to an "assigned risk" policy for 5 years after that (at a much higher cost).
Don't figure "That's what insurance is for." Raise the deductible on your policy and don't file claims unless there's a hardship involved.

You can pay for decades--you make one claim, and you're either cancelled or have to pay for it anyway through increased premiums. And heaven forbid you have the "big one" that you bought that homeowner's policy for in the first place. They'll refuse to pay and you'll spend years taking them to court.

The actuarial tables are for a planet we no longer live on. The air holds five percent more moisture now. Extra heat feeds more violent storms. This will squeeze insurers, and they will make the difference up out of their policy holders losses.

I expect many more exceptions due to flood an act of God, when in reality, this is the new normal.

That's all it is.

Its a fear based industry.