To Claim or Not to Claim: THAT is the Question!

6/21/2017 (Permalink)

When faced with a water damage situation, either at home or commercially, one of the first questions to ask yourself is “Should I file a claim?” There are a number of reasons why this is an important factor to consider once you have the mitigation (cleanup) portion under control.

Of course, the first step with any water loss is to get help immediately to stop the source of the leak, BEFORE you mitigate the loss (get it cleaned up)! Call a team like SERVPRO OF SAN LUIS OBISPO and ATASCADERO even if the water is still flowing—we help get the source stopped/shut off until repairs can be completed to prevent further damage.

By not acting fast, secondary damage can result in mold issues which may or may not be covered by your insurance policy. In California, there are restrictions as to how much coverage will be offered for mold remediation. So regardless as to whether or not you decide to file a claim, it’s still of vital importance that you act fast. In fact, your insurance company might even try to use your lack of action against you and try to deny the claim because you waited too long & inadvertently caused more damage than otherwise would have been the case. So always pick up the phone and call a team like SERVPRO OF SAN LUIS OBISPO and ATASCADERO right away.

Once the leak is stopped, it’s time to mitigate the loss and then evaluate the situation to determine if it’s actually worth it to file a claim with your insurance carrier. In many cases, smaller water damage losses can and should be paid out of pocket to save you money in the long run. Unless it’s very obvious that the claim is going to be a huge bill due to extensive damage, always take the time to weigh the pros & cons before you commit to filing a claim.

Don’t worry about having the work done before you call your carrier—they were going to tell you to get the work done ASAP anyway, and it’s YOUR CHOICE as the insured as to which vendor you choose to do the work.

First, request an estimate from the mitigation team—they should be able to give you some kind of ballpark dollar amount which you can use to weigh against your deductible as well as your total annual premium cost. Then, you’ll want to consider how much your premium cost stands to rise based on this new claim—you’ll want to contact your insurance agent who sold you the policy to discuss this with him/her. (Don’t bother trying to discuss this with an insurance adjuster, because they won’t be able to discuss premium rates with you).

In a nutshell, you need to try & calculate the cost for the loss to be cleaned up and repaired, versus your deductible and current/projected insurance premium. If it’s going to cost you less in the long run to just pay out of pocket, you’re better off not filing a claim. This is where the conversation with your agent comes into play—they can tell you how much your rates could be affected if you file a claim and show you on paper just how much money you stand to save over the course of time. This is largely dependent on the magnitude of the loss—if it’s obviously a huge water loss with extensive damage to the property, then filing a claim is the obvious choice. It’s the smaller incidents that might not prove worthy of filing a claim, because in the long run you might end up paying more in increased premiums than if you had just paid for the mitigation & repairs yourself.  You’d be surprised how many people don’t stop for a moment & consider all these factors before picking up the phone and filing a claim.

Water damage losses, particularly in California, are the most common type of claim filed by homeowners. & They can get quite expensive depending on the severity of the loss. Insurance carriers have reacted to this trend by implementing new policies & lobbying for new laws by which YOU as the insured, carry a higher burden than you might expect: the claim can not only raise your rates for as long as you own the property, but depending on the insurance company, the claim could follow you even if/when you sell the property and buy a different property. Yes, you read that correctly: your premiums might be affected by a water loss at a different property than the one at which you filed the claim. A simple analogy would be that it can be much like getting a speeding ticket: the ticket affects your car insurance rates, and selling your car & buying a different one won’t make that speeding ticket go away. THIS is why it’s so important to take a moment to consider the long-term effects vs. the short-term gain. Ask yourself: “Should I file a claim?”

REMEMBER: regardless of whether or not you file a claim, keep in mind that you’re still going to have to get the work done by a professional reputable water mitigation team. SERVPRO OF SAN LUIS OBISPO and ATASCADERO is available 24/7 to respond to your needs from SLO to San Simeon and everywhere in-between, including (but not limited to): Paso Robles, San Ardo, Cambria, Morro Bay, Cayucos, Los Osos, Templeton, Santa Margarita…and more!

We hope this helps. We offer services ranging from water damage mitigation to mold remediation to fire/smoke damage. If you have any questions, comments, concerns, or are in need of immediate assistance at your home or place of business, call SERVPRO OF SAN LUIS OBISPO and ATASCADERO—we’ll be happy to assist.