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Insurance claim considerations

Posted by Rona Fischman February 7, 2011 02:11 PM

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Today, Sam Schneiderman, broker owner of Great Boston Home Team discusses something that many homeowners are either doing or thinking of doing as a result of the extreme weather that weíve been having.
Challenging weather conditions often lead to property damage and insurance claims.

Some property owners are reluctant to make a claim because it might increase their insurance premiums or get their insurance canceled. Others are afraid that if they even ask about putting in a claim, it might end up on their C.L.U.E. report, so they avoid making the claim. Others donít really understand what is and isnít covered or how their insurance deductible affects them.

Occasional claims for valid casualties are usually not cause for rate increases or insurance cancellation, according to the insurance agents that I spoke with.

C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. The CLUE database is a claims history database that many, but not all, insurance companies subscribe to. It allows them to review a consumerís claim information when they are considering providing insurance and decide what price to charge for that coverage. Information on losses is stored in the CLUE database for up to 7 years.

Since the CLUE database is not supposed to include inquiries, when in doubt about whether or not it makes sense to make a claim, itís best to call your insurance agent first and be clear that you are only inquiring about or considering making a claim and just want some information.

When considering making a claim, you must understand some basics about your insurance coverage. First, you want to know what your insurance deductible is. That is the amount that you are responsible for paying before the insurance company begins to pay. You also need to know what is and is not covered. An inquiry to your insurance agent can sort those out.

Letís say that you are considering making a claim because you have a leak into your home caused by an ice dam. As I understand it, the damage caused by the ice dam would probably be covered along with the cost to protect your property from further damage. (I think that would probably include ice removal.) Depending on your policy, furniture that was damaged as a result of the leak would most likely be covered along with damage to ceilings, walls, floors, mold remediation, drying services, etc. As I understand it, the actual cost to correct the cause of the problem, in this case the ice dam, is usually not covered. (If you had a separate home warranty with that coverage, you might have a separate claim under that policy.)

Using the example above, assume that the following costs were incurred, aside from the actual cost to repair the problem:
ē $125 for a roofer to assess damage and remove ice to prevent further damage
ē $150 to refinish water stained wood furniture
ē $1,000 to remove wet wall board and insulation, replace and paint it
ē $150 to dry the wall cavity and apply coating to avoid mold

With a total cost of $1,425 and a deductible of $1,000, the amount that the insurance company will pay is $425.

If a homeowner receives a discount for being claim free for a number of years that should also be considered when deciding whether or not to make a claim.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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