Most people are unaware of the numerous hidden factors involved with insurance claims. Insurance companies use these factors to determine how much they will pay out on a claim. By understanding these factors, you can be sure that you are getting the most from your insurance policy while keeping your premiums affordable.
The first factor is the amount of coverage that you have. The more coverage you have, the more likely it is that your claim will be paid. Insurance companies use this to their advantage by offering lower premiums to those with more policies and coverage types. In some instances, multiple policies may need to be used to cover one incident. Using policies together increases the chances of having your claim covered, and also potentially increases the amount of damage or liability limits available to cover claims.
Your deductible is the second factor involved in insurance claims. The higher your deductible, the less money you will have to pay out of pocket for your insurance premium, however, it also means that you will have more to pay out in the event of a claim, which can sometimes equate to no coverage.
For example, if you saved on a monthly premium by selecting a $1000 comprehensive deductible, you’d have a glass claim for a cracked windshield. The cost of replacing the windshield is only going to be $600, therefore you would be responsible for the full cost of the repair because it is under your deductible amount. Also remember, deductibles are per incident, so a series of small claims could take a bite out of your budget.
The third factor is the length of time that you have been with the company. The longer you have been with the company, the more likely it is that your claim will be paid. Insurance companies offer lower premiums to those who have been with them for a longer period of time, and an insurance adjuster is more likely to cover a questionable claim when it’s filed by a long-term policyholder. Also, the longer you have been loyal to one insurer, the less likely you are to be canceled as a result of claims activity.
Breaking the Law
A fourth factor is whether you were breaking the law when your claim occurred. If you were speeding, driving under the influence, or robbing a bank, your claim may not be covered. If you are at fault for an accident, your insurance company may deny your claim or only pay a portion of it. In some states, if you are found to be at fault for an accident, your rates will increase. Be sure that you are always abiding by the law to avoid questions about claims coverage.
These are some hidden factors to be aware of when it comes to insurance claims. While this list is not all-inclusive, it does give you a good idea of the things that insurance companies take into consideration when processing claims. The more you know about how claims are handled, the better equipped you will be to get the most out of your policy.