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Archive for Tuesday, March 14, 2006

File insurance claim or fix it?

Policies can turn costly when minor damage involved

March 14, 2006

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Homeowner's insurance policies are designed to provide financial protection from damage suffered in the kinds of storms that ripped through Lawrence early Sunday.

But that doesn't necessarily mean policy owners should rush to seek reimbursement - at least when the damage is considered minor.

"People say, 'I'm paying for this insurance, I take it out to protect my property, and now you're telling me not to file claims?'" said Charlene Bailey, a spokeswoman for the Kansas Insurance Department. "But the reality is, a lot of times people will file a lot of small claims, which probably have a greater impact on raising a premium charge in the future than if you have a major impact.

"Obviously, if your roof blows off, or if all your shingles blow off and you need to have a new roof, that's different. But if you're looking at something that can be fairly reasonably repaired without a lot of expense, you need to consider that."

Insurance agents across Lawrence have been fielding calls from concerned residents whose homes and businesses had been pelted by hail, buffeted by winds or hit with a mixture of the two, knocking out power to thousands.

Shelby Bean, an agent recording claims Monday at CEK Insurance, said the vast majority of claims coming into her office involved damages that likely would run from $1,000 to $4,000.

With policy deductibles typically running at $1,000 or $1,500, she said, homeowners should think carefully before calling in an adjuster to review a case of a leaning fence or a few missing shingles.

Claims history plays a role in setting future premiums, she said, and making a relatively small claim could end up costing a consumer more in the long run. She advises unsure policyholders to call in a roofer to examine missing shingles, for example, before deciding whether to get the insurance company involved.

Be aware

The Kansas Insurance Department advises individuals to be cautious when filing smaller claims. "If loss exceeds the deductible by less than $200, consider paying out-of-pocket," spokeswoman Charlene Bailey says.

Companies will sometimes "non-renew" a policy because of claims frequency, she says. By law, a company cannot cancel, non-renew or increase the premium of a homeowner's policy that has been in effect for more than 45 days, solely because the insured filed a first claim on the policy.

But if a policy owner has filed more than one claim, she says, there is no law to prevent the firm from non-renewing.

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