Should You File a Small Insurance Claim? A Myrtle Beach Perspective
October 11, 2024, by Brad Davis, CIC
When dealing with minor incidents involving your home or vehicle in Myrtle Beach, SC, the decision to file an insurance claim can be tricky. Whether it’s a fender bender on Kings Highway or damage from a coastal storm, understanding your options is crucial. Let’s explore whether you should file a claim and what you should consider in our vibrant coastal community.
*I need to put this disclaimer right up front. I, nor anyone in our office, is a licensed claims adjuster. Only the claims adjuster or claim department at your insurance company can settle a claim, approve or deny a claim, etc. This blog is to provide helpful information but does not at all override the insured's duty to report a claim (or potential claim) or other responsibility as it is outlined in their policy.
When in Doubt, File the Claim
If you’re unsure about filing a claim after an incident in Myrtle Beach, it’s often best to go ahead and file. Insurance is designed to help you recover from unexpected events. Even minor claims can alleviate financial stress, especially with the unpredictable weather and wear-and-tear common in coastal living.
Risks of Not Filing
Avoiding a small claim might seem harmless, but it can lead to potential risks. Some Myrtle Beach insurance companies require policyholders to report all incidents, even if you don't plan to file a claim.
Future Claims: If you skip reporting an incident, you might find your future claims denied based on that unreported event.
Here is what could happen. You fix a small amount of damage yourself, but then find out later there was more damage than you thought. If you then decide to file a claim the insurance company my decline it. Why? Because you didn't properly report it. The insurance company's reason may be that they could have fixed the damage all up front and for cheaper.
Some Claims Need to be Filed: There are some incidents that are more important to claim.
- Potential liability - when someone may be injured, you don't want to be surprised down the road when they claim $$$ for being hurt. IT HAPPENS!
- Water damage to property - sometimes water damage can be hidden behind walls and come back to really bit you later.
- Any incident that has possibility of becoming worse! Such as unseen damage, potential liability (physical or emotional), or whatever.
Again - when in doubt, file the claim.
Weighing the Financial Impact
In a tourist-driven economy like Myrtle Beach, it’s essential to think about how filing a claim might affect your premiums. Generally, filing a claim can influence your rates, but many factors are at play, including your overall claims history and the specifics of your policy.
If repair costs are significantly lower than your deductible—like a small scratch from a golf cart accident, it might make sense to cover it out of pocket.
Even if the costs are higher than your deductible, you may be in a situation where a claim does not make sense. Say your deductible is $1,000 and the costs are $1,200. I cannot say what impact that will have on your future insurance premiums, but there is a good chance it will cost you more than the $200 you get from the claim over the next three to five years.
Keep in mind, however, if you anticipate rising repair costs or a chance of other problems coming up you may want to file a claim, even for smaller amounts.
Here is an example of when a client decided not to file a claim for a small scratch on their vehicle (from bumping a post). The client has four children, and they know there is a better than average chance they will have another incident within a short period. Their thought was it may be better to use their insurance on a larger claim than report small claims to help keep their insurance premium manageable.
Another way to look at it - Years ago, it was common to see very low deductibles on auto insurance. Not so much anymore. Insurance premiums have gone up drastically in the last few years and underwriting guidelines have tightened (making it harder to get insurance in some cases). The response is that insurance is becoming protection for large losses. It doesn't make sense these days to have insurance to cover small damages. What is considered a small loss is in the perspective of the individual. More and more clients are OK paying up to $10,000 or more as a deductible or instead of filing a claim, knowing that smaller claims will likely increase their premium and may cost more in the long run.
Additional Considerations and Thoughts
- Was the accident or damage your fault? This varies by state and sometimes the type of insurance. For auto insurance in South Carolina - you typically should file a claim on the insurance belonging to the at-fault party. There are other considerations around this question that we are not really getting into in this blog.
- If you are going to file a claim, it's better to do it quickly. Waiting longer than reasonable can cause coverage issues down the road.
- READ YOUR POLICY! Not only to understand your coverage, but to also know your duties in case of damage or possible claim.
- What if I submit a claim and nothing is paid out? Now this can be treated differently by carriers, but even a $0 pay claim can affect your insurance premium. It still costs insurance companies to investigate a claim that does not pay, and it shows (statistically) that you are more likely to file another claim.
- Do some claims impact your insurance premium more than others? Yes, but this again varies by company and state. It is typical regarding a home insurance policy, however, for a fire or theft claim to more negatively affect your insurance premium as compared to an "Act of God" such as wind damage.
- Will an insurance claim(s) make it harder to get insurance in the future or to change insurance companies. This is a big ole YES. There is too much to dive into this all the way but know claims can definitely affect future insurance purchases. Not to mention, the insurance market (especially home insurance) is tight in Myrtle Beach. It is already a little difficult to find affordable insurance as it is.
Here is a blog from June 2024 about the hard insurance market we are in.
- Let me know of other questions or thoughts you guys have!
Local Insight
As a resident of Myrtle Beach, understanding local insurance trends is vital. Coastal living can lead to unique claims, especially with hurricanes and summer storms. Familiarizing yourself with local providers and their claims processes can help you make more informed decisions.
Conclusion
Deciding whether to file a small insurance claim in Myrtle Beach, SC, requires careful consideration. If you’re uncertain, it’s usually best to file the claim. Keeping your insurer informed can help protect you from potential issues down the line.
Ultimately, your insurance is there to provide peace of mind, especially in a dynamic area like Myrtle Beach. By understanding the implications of your choices, you can safeguard your financial well-being while enjoying the beauty of our coastal community.
Side Note: *Some insurance companies, like Travelers, have a team within their claims department that give advice on whether or not to file a claim or if damage is likely to be covered. Definitely take advantage of this when you can!
Care to see what we can do for your home, auto, flood (or other) insurance? You can Start a Quote Here or call (843) 213-0000 - either way we will shop the insurance market and offer you our best!
ThinkDavisInsurance.com
HOME | AUTO | FLOOD
We are your local independent insurance agency for Myrtle Beach providing you with peace of mind at a price that's right for you. Let Davis Insurance Associates help you find affordable home and auto insurance in South Carolina and North Carolina.