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Almost everyone has insurance coverage in one form or another. Whether it’s general liability insurance for their business, home insurance for their property, workers’ compensation for their employees, or car insurance for their vehicle, insurance policies protect people from various liabilities.
Yet, not everyone knows how to properly file an insurance claim. While the hope is that you’ll never have to use your insurance, ignorance is not bliss when it comes to knowing how to file a claim. In fact, there are some common mistakes that could hurt you if you file a claim the wrong way.
So, how do you prepare for all of life’s lemons?
Start by learning about (and then avoiding) these common insurance claim issues.
Not fully reading your policy
You want to protect your small business, right?
Of course you do! That’s why you got insurance in the first place. So, you should know exactly what your insurance policy does and doesn’t cover. Like with any legally binding document, it’s crucial that you read the entire thing. That includes the fine print.
Reading through the entirety of the insurance policy will tell you everything you need to know, including:
- How to file a claim
- What’s covered by the policy
- When to file a claim
- Policy exclusions
- Filing requirements
If you have trouble understanding the terms of your policy, consider reading through our blog for some insurance 101!
Not filing the claim quickly enough
The most common mistake made by insurance claim filers is that they wait too long to notify their insurance company of the issue.
The moment an accident or loss happens, it’s vital that you alert your insurer immediately. It’s easier to verify a claim when the event is recent and evidence is fresh.
Over time, you may forget crucial details that could play a key role in the claim investigation and resolution. And if you wait for weeks, the insurer might doubt the severity of the incident, or say that it happened in the interim.
Most policies have a timely notice of loss condition. So, if something does occur, be sure to notify your insurance agent. Right. Away. Failure to do so may result in denial of coverage.
Filing when you don’t need to
On the flip side, there are times when you don’t actually need to file with insurance coverage.
If the cost of reporting an issue outweighs the actual damages, it may be smarter, easier and faster to just handle it yourself. When a file is claimed (even if you’re not at-fault) it may have an impact on your deductible as well as your premiums.
For instance, you work in clients’ homes regularly. Should you scrape a wall while moving your equipment, it may be cheaper to simply pay out of pocket to repair the scuff mark than to file an insurance claim and have your insurance pay to repaint just that section of the wall.
Perform a cost analysis to decide what’s your best move, financially speaking.
Documentation is one of the most important parts of filing an insurance claim.
The moment after you’ve contacted insurance, you next need to document everything. And we mean everything. This includes:
- Pictures, including multiple angles and distances
- Taking detailed notes
- Contact information of the third party
Insurers rely on your records to settle a claim. This may require a detailed inventory of the damaged and undamaged property, including the costs, values, quantities, and total loss claimed.
Once you’ve begun to communicate with your insurance agent, document all of your interactions as well, including who you spoke with, what was discussed, and when the discussion took place.
Not notifying the authorities
If illegal actions occurred or someone was harmed, most insurance policies will require that you notify the police of the incident. Calling 9-1-1 in the case of a bad car accident is common sense, but even if your property is damaged, vandalized, or stolen, you need to give the police a ring before you file a property claim.
Notifying the proper authorities can help identify who was responsible for the crime and acts as evidence that an accident or loss actually occurred. Insurers will use this as proof to verify your initial claim.
In addition, many states legally require you to notify the police if an accident occurs.
Admitting you were at fault
Whenever an accident occurs, rule number one is to never admit fault or liability. Even if you think you were the chief party responsible for the property damage, it could be the result of a different source.
Most liability policies don’t allow the policyholder to assume legal obligation without the insurer consenting to the issue. Admitting fault could not only harm your legal defense, but could also result in a breach of contract. If that were to occur, your insurer could rightfully deny you coverage.
Not cooperating with your insurer
Many policies require that you fully cooperate and communicate with your insurer. After all, didn’t you hire them to help you out in these sorts of situations? You’re obligated to participate in both the investigation and the settlement of the initial claim, or else it may be voided.
So, if your insurer asks you to provide critical information, don’t hold back. Should an insurer decide that you failed to provide the necessary details to pursue a claim, you could be denied coverage.
Not keeping damaged property
Speedy resolution often comes down to having clear evidence of damage. If your property has been damaged, do not throw it away. Even if you’re tempted to get rid of the clutter so you can get back to business, the property must remain as is until an insurance adjuster can properly inspect the property damage.
For instance, if your car is involved in an accident, you can’t go and get the problem fixed before it has been examined by your insurer. Instead, be patient, keep records of the loss, and wait to repair the issues. It will pay off in the end.
Not having insurance
Of course, the ultimate blunder an individual or small business can make is not having insurance at all!
Put simply, insurance is an absolute must-have. It protects you and your business from risk, especially if you frequently interact with third parties like customers or contractors.
But where do you get a policy that not only safeguards you from those inherent risks, but doesn’t have a bunch of complicated jargon and hidden clauses?
Right here, at Thimble.
We offer on-demand insurance for small businesses on-the-go. With Thimble, you can get the protection you need in under a minute. Affordable policies go by the hour, day, or month. Just like getting your insurance policy, filing a claim with us is an easy and hassle-free process.
Want to make sure that your insurance works as expected? Then follow this advice: read your policy, react quickly, notify all the proper parties, don’t admit fault and do document everything.
But make no mistake, it all starts with making sure that you’re actually insured for the respective issue with the right company.