Should you file a claim?

[Cameron Moore]

Many people mistake insurance for being anything but a safety net. I often see clients filing claims ANYTIME there is damage to a vehicle or a home they have. The issue with that is, they do not stop to see how much the out of pocket expense will cost. In fact, they are sometimes shocked to find out that the deductible covers most of the repair amount, so the insurance company pays less than the insured. 

Claims stay on your insurance record for 5 years. Regardless of what anyone says, it will effect your premium for that long (if not longer). You do not want to file a claim that would cost $5k if you have a deuctible of $4k. Not only would you pretty much be paying out of pocket, but you can expect to see a jump in premium for the next 5 years. The jump could (and probably would) cost more than that extra $1k. 

Work with an insurance broker. Most of the time, if you call your captive agents to get advice then they will just open a claim case no matter if you end up going through with the claim. That too will effect premiums going forward. Have the "middle man" broker to give advice without being the one to deal with the claim. Let's not mess with our cash flow for no reason. Happy investing!!