Because most people cannot afford to cover the cost of repairing or replacing property and getting medical care, insurance of various types is standard. Insurance companies cover the aforementioned costs on your behalf in return for your paying a routine premium. There are benefits to filing a claim with your own insurance company, but there also are drawbacks. These pros and cons may determine what you do after a loss.
Depending on how you have set up your policy, you might have a deductible associated with your policy. A deductible is the amount you have to pay out of pocket before the insurance company steps in to help you. If you pay higher premiums, you can get a policy with no deductible, but people often have high deductibles in order to keep monthly premiums low. If you file with your own company, it is your responsibility to pay your deductible.
In some cases, insurance companies will raise your premiums if you make too many claims in a year or if the claim you make is very high. If you file with your own company, you risk paying more for insurance in the future.
Filing a claim with your own insurance company may be less stressful, as you already know your agent and the exact terms of your policy. Legally, you do not need to worry about whether the loss was your fault unless your policy has specific restrictions. Both of these factors may speed up your claims process.
The Claims Process
Regardless of whether you file with your own company or you file against someone else's policy, you still have to go through the claims process. This means you'll have to submit the proper paperwork, verify your loss with an insurance adjuster/inspector and decide whether you'll accept the offer from the insurance company. From this standpoint, it makes little difference with which company you file.
If you are not sure whether you should file with your own insurance company, the best option is to talk to your insurance agent and a licensed attorney. Your agent can review your policy and insurance history and tell you whether the insurance company will raise your premiums if you file. Your attorney will be able to review both your policy and the policy of the other insurance company to determine which is legally and financially more beneficial.
If you experience a loss, keep in mind that you may be better off not filing an insurance claim with ANY company. It depends on the situation. For example, even if someone else's policy will pick up a small claim and you avoid paying your deductible, the claim may become worthless when you factor in the time and effort it would take to resolve the claim. Additionally, filing a claim and then challenging the insurance company's offer can sour relations between you and the insurance company regardless of whether you file with your company or someone else's. You are not obligated to make a claim, and ultimately it is up to you to determine if and where to file.
Wanda Thibodeaux is a freelance writer and editor based in Eagan, Minn. She has been published in both print and Web publications and has written on everything from fly fishing to parenting. She currently works through her business website, Takingdictation.com, which functions globally and welcomes new clients.