Tough Call: Pay It or Claim It?
To pay it or to claim it? That is the question, one liable to haunt insurance customers facing repair bills not far above their deductible. So when should you foot the tab on your own rather than submit the claim to your insurance professional? Two Texas Farm Bureau Insurance agency managers offer their take on one of the trickiest judgment calls in the trade.
Auto Matters
Your teenage daughter gets into a fender bender — for the third time since getting her license 18 months ago. Fortunately, the other driver’s car came through it without a scratch. But a garage estimates it’ll cost $625 to fix the bumper. Your policy has a $500 deductible.
“We come across this type of situation all the time,” says Ray Harper, who manages all four Texas Farm Bureau Insurance agencies in Travis County. “The only hard-and-fast rule I tell them is to call me first before submitting the claim. I’ll help them figure it out.”
Harper crunches the numbers while also taking the client’s claim history into consideration.
“If you have two at-fault claims within a three-year period, you could be looking at a rate increase.”
Adds Eddie Chambers, who manages the Texas Farm Bureau Insurance agency in Graham: “It’s hard for me to advise someone to pay out of pocket. I simply don’t like to do that. But if you’re looking at a significant rate increase, it’s often the thing that makes more sense. I’ve done it myself in the past.”
Hail damage to your car or a rock cracking your windshield are notable exceptions. These circumstances fall into the act-of-God category and never counts against you.
“Most people have a $500 deductible on their auto insurance, and it’s not that much to replace a windshield usually, but go ahead and let us know about it anyway,” Harper adds. “We’re here to help.”
On the Home Front
As with car insurance, your rates can climb if you file several claims within a three-year period (outside of the act-of-God exception).
“I just had a client call to say a neighbor got a new roof because of hail damage so he climbed onto his but couldn’t determine if he had a problem or not,” Chamber says. “It doesn’t cost customers anything for us to send out an adjustor to take a look.”
Harper also tells his clients, “they have a responsibility to minimize the damage, so if a wind blows a hole through your roof, put up a tarp and take other reasonable steps to safeguard your property.”
Meanwhile, a fire resulting from faulty wiring or flooding due to a burst washing machine hose are two examples of an at-fault claim, which typically count against the insured.
“Most people have at least a 1 percent deductible on their home, so the damage has to exceed a certain level in order to make the claim worth it,” Harper explains. “Call your agent, even if it’s on a weekend, so they can help you sort through your policy and make recommendations on where to go from that. It’s what we do, what we want to do.”
(Coverage and discounts are subject to qualifications and policy terms, and may vary by situation. ©2014 Texas Farm Bureau)
