Don't Be Too Quick to File a Claim

While it is important to file an insurance claim if your auto or home has suffered significant damage, filing too many claims over time can get you in some hot water, especially when it comes to your wallet.

Some instances where you can probably avoid filing a claim include things like a fender bender or your bathtub overflowing.

The facts are simple - insurers are more likely to increase premiums or drop coverage altogether if you've made too many claims. Sometimes just consulting with an agent over whether or not to file a claim can get a consumer in hot water.

While every situation should be evaluated differently, here are some instances where you may want to think twice about filing a claim:

• In the event the damage is less than $1,000, do you have a policy where you raised your deductible to $500, $1,000 or higher and the damages will not exceed those limits? If that is the case, the best advice may be to go into your emergency fund or even put the costs on a credit card. By doing so, you avoid the risks of higher premiums or not having your policy renewed.
• Many traffic accidents do not result in injuries to the motorists, so think twice before filing a claim. In the event you are the only car involved, you may want to consider covering the damage yourself if your finances dictate such. Paying the expenses for an accident out-of-pocket could be less expensive than dealing with higher premiums that could very well result.
• In the event you are in an auto accident, note that you are not legally required to file an insurance claim. You should, however, let your insurer know of the situation in the event someone else makes a claim on your policy. The idea here is your insurer will be prepared and you want have to make up the story as you go along.
• When it comes to your residence, insurers have been eyeing an increasing amount of water damage and mold claims in a number of states. Those individuals who put in water damage claims run the risk of losing their coverage, and could find that coverage is not available at any price. Insurers utilize a central database known as the Comprehensive Loss Underwriting Exchange (CLUE), which assists them in deciding whether to insure a home or not. If mold losses are involved, even a single water damage claim on a residence could lead insurers to turn down coverage.
• In the event damage was a result of your neglect, an insurer will look at the situation as you failed to properly maintain the home. This can be the case with a leaky roof, termites in the home, leaky faucets and so on.
• Finally, you also could run into problems if you worsened a problem in the home. Be sure to get any necessary repairs done so that a bad situation doesn't become worse.

The bottom line is to use your insurance wisely and review each situation before automatically filing a claim.