What you want to know before you file an insurance claim
When it comes to personal property insurance, whether it be for your home or auto, there are certain things you should know about your policy before disaster strikes. Otherwise, you could get stuck in a surprisingly unfortunate situation when it comes time to file a claim.
#1 Coverage limits- So, you know you have dwelling coverage on your home which covers the structure of your home in the event of a covered loss, for example, a house fire. However, did you know that your home is only covered up to the limits stated in your policy? When you first purchase your homeowners insurance policy, your agent should best determine the coverage limits by calculating your home’s replacement value. Sometimes when a policy renews over the course of a few years these coverage limits no longer adequately cover the home. Review your policy regularly and talk to your agent about your limits.
#2 Deductibles- When you purchased your auto insurance policy did you increase your deductibles as high as possible to pay the lower premium? When it comes time to file a claim you may be regretting this decision. Keep in mind that in the event of a covered claim, you are still responsible for paying your policy deductibles before your policy will begin paying towards your claim. For example, if you are involved in a covered auto accident that involves $5,000 worth of damage but you have a $1,000 deductible on your policy, you are responsible for the first $1,000. Your policy would only pay out $4,000 towards that claim.
#3 Exclusions- Every insurance policy excludes certain items or events for coverage. For example, a standard homeowners policy does not typically cover damage caused by sewer and drain backup. You may be able to purchase additional coverage for these types of exclusions that a standard policy doesn’t cover.
#4 Covered Perils- Don’t wait for a flood to strike, for example, before finding out that your homeowners insurance doesn’t cover flood damage (which is typical of all home insurance policies). Read your policy thoroughly to understand what perils are covered and what perils are not covered so you know when and where you may want to purchase additional coverage.
