To claim or not to claim?

That is the question faced by many policyholders who are either concerned about pushing up their premium, or want to make sure they’re getting their money’s worth from an insurer. Here’s some insight that may help.

It’s understandable why many policyholders choose not to make a claim. If the settlement wouldn’t amount to much more than then excess, it’s not worth the effort. But on the other hand not claiming on your insurance for fear of a rising premium could also be a false economy.

McClarrons offer advice on when to claim and when not to claim.

Not to claim
Using your insurance policy to make several smaller claims will not prove cost-effective in the long run. You may think that you have only claimed for 50% of your paid premium so the insurers are still making money. On the contrary, insurers have to factor in a large chunk of everyone’s premium for total loss claims.

Imagine a client pays £1,000 for their insurance, and they have a total loss that settles at £1million. The insurer needs to recoup enough premium across the whole of their business to create any margin.

On the whole, making several smaller claims will see your premium rise by more than the claims paid. It will also mean you will have fewer options if you wish to change providers as the insurers will see you as a less attractive risk.

That’s not to say that all small claims scenarios should be ignored. If a painting has been damaged and you are struggling to find an appropriate restorer locally, your insurance provider will likely have partner businesses who could help you.

Always notify insurers of any incidents that may cause a liability claim. This could be a slip or trip from a third party, your dog biting something it shouldn’t or a wayward golf shot bouncing off someone’s car. Insurers will always want to know as soon as possible so they can minimise any claim.

The main advantage for you is that the emotional stress will be vastly reduced. Rather than dealing with a raft of phone calls or emails from the injured party, a claims handler will take all of this hassle away from you.

Use your broker
Your insurance broker is not simply there to conduct your renewal review and then ignore you for a year. They should have a strong working relationship with the insurer, and the experience and knowledge to advise you as to the best course of action if you are on the fence about making a claim.

If your broker has an in-house claims team then even better, they will be able to give you advice on excesses, how the claim will be settled and what you can do to mitigate the risk going forwards.

McClarrons have an in-house claims team who can advise on whether to make a claim or not. Contacting them in the first instance means the incident will be on record regardless, which is helpful for keeping track of dates and details.

Author Ben Pickles
Author: Ben Pickles, Art & Private Client Manager
Tel: 07376 082402

To claim or not to claim blog post

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