To claim or not to claim

If you haven’t noticed, in the past couple of years, the cost of everything has gone through the roof! And that includes insurance premiums. The cost of my annual homeowner’s insurance 5 years ago was around $500. Today it’s almost DOUBLE! There are 2 main drivers that affect the cost of insurance.

  1. How much a company pays out in claims vs. how much money they take in for premiums. There are many people who think that insurance companies are greedy, money hungry companies, who will do anything to make a profit… including not paying for claims they clearly owe. Believe it or not, most insurance companies operate on a razor thin margin. There are many insurance companies that operate at a loss for a period, meaning they pay out more in claims than they take in premiums. This is especially true in NC since we are a coastal state, and many times insurance companies are stuck paying devastating aftermath of hurricanes.
  1. The cost of materials! As I mentioned before, EVERYTHING has gone up. Although it appears that we have put the COVID-19 issue to rest, the results of the pandemic are, unfortunately, here to stay. Not only are we left dealing with the increased cost of materials, but we are also dealing with the increased cost of labor. If you haven’t gotten a quote lately to upgrade something in your house, I encourage you to try it. Something as simple as a deck behind your house can cost you as much as a nice mid-sized sedan.

After spending almost 20 years in the insurance industry, mixed between being and adjuster and being an agent, there are some tips I’ve picked up along the way and I’d love to share a few with you.

  1. Make sure you do an annual review with your agent to make sure you have the right coverage. If you bought your house 5 or more years ago for $140K, the odds are it’s probably worth double now. And if you haven’t updated your coverage and your house burns down, $140K is probably the most you’re going to get.
  1. In the event of a homeowner’s claim, contact your agent first! Let them advise you on whether it’s something you need to file or not. With many insurance carriers, the simple act of filing a claim, whether damages are paid out or not, can affect your rates at renewal. If the claim involves water damage, mold damage, fire, smoke or biohazard, many agents will advise you to call US and we can come out to assess at no cost and advise you and your agent if it’s something worth opening a claim. If not, we can still help in most cases.