Does every incident or bit of damage to your home mean you need to be filing homeowners insurance claims at every turn? No, of course. As with so many aspects of life around your home, there are certain best practices to follow when considering filing a homeowners insurance claim—sometimes even before filing, actually.
“We don’t just report everything that comes in the door,” says Brian Bergman, President/CEO Personal & Commercial Insurance with Meyerson-Roth Insurance in Long Beach. “That’s part of the best practices.”
Have a Conversation with Your Broker
“I would say to people, always call your broker and have a conversation before you call the insurance company,” Bergman says. “The biggest reason for that is, if you have an incident, you are required, or your policy explains, that you have to report to the company as soon as practical.
“But you call an insurance company and say, ‘I’ve had some damage, I’m not sure what I’m doing,’ they mark it down in your file that you had damage, now you have a claim. You haven’t done anything more than say I’ve had a little damage—it could be that a birdhouse fell and you were just concerned—and they mark it down that you have a claim.
“That can work against you,” Bergman continues. “Because there’s a claims history database with insurance, similar to a credit report—you go apply for a couple loans, you may not take out the loan and have the loan against your credit report, but you’ve had a couple inquiries on your credit report, and that hurts your credit report. It’s the same fashion with insurance. You call up and inquire about a claim and they mark it down, odds are that goes into the national database that you had some kind of incident. And it gets to be very annoying.”
Understand Your Options
“Most of the time, I’ll talk people off the ledge,” Bergman says of people who are considering filing a claim but may welcome his perspective. They’ll say things like, “‘We have this tremendous leak in the bedroom, the water’s coming in,’” he notes, “and I go, Alright, how bad is the leak? How many buckets? And they go, ‘No, there’s just a little stain in the ceiling, the size of a piece of paper.’ And I’ll say if it’s nothing worse than that, it will cost you $500 to have it fixed, your deductible is $1,000, so I think you should look into it and call it a day.
“It’s no benefit to me to tell them not to put a claim in, except to make them happy and understand that if they call the company and put the claim in, it goes against them.”
Do the Math
“Now, you’re with a company and you put one or two incidents in, now the company may start to say, ‘Maybe we should cut our losses here, because the third claim is going to be the big one.’ Because everything is statistics. They don’t want that, but now you’ve put yourself on that radar, and you don’t want to be on that radar.
“So I try to tell people to self-insure where they can, the small claims,” Bergman says. “If it turns out to be a large claim, put it in—I don’t want anybody to suffer damage. But if it’s $1,500, $1,000, I give them the option: Do you want this on your record so you can get a $300 check from the insurance company? At the end of the day, if your rates go up by a couple hundred, is it really worth it? You tell me. It’s not for me to tell you. You tell me.”
Work with an Insurance-Savvy Contractor
“Try to use people who specialize in dealing with insurance companies rather than your average contractor,” Bergman recommends. “Nothing against the average contractor, but they don’t speak the same language as the insurance companies. And in the long run, it will help you. It’s like going to court. Yes, you can go to court yourself and figure it all out as you go, or hire a lawyer.
“So I say, find people that deal with insurance companies,” he continues. “They use the software the insurance companies use, they know the rate structure, how they pay—so much for a piece of sheetrock, so much for a foot of molding—they know what the insurance companies want and they know how the claim gets explained to the insurance company and where they can make the best of the claim.”
Keep Your Records Complete
“Getting information is a key part of filing a claim,” Bergman says. “I tell people to keep a record of everything, take pictures of everything, document everything.”
Brian Bergman is President / CEO Personal & Commercial Insurance at Meyerson-Roth Insurance in Long Beach. Learn more at yourcoverage.com.