When an accident happens, in your personal life or with your business, many people look to insurance to cover the costs. Before you pick up a phone and call your carrier, it’s important to understand how filing a claim can affect your premium and the policy itself.
What Happens When You File a Claim
Filing a claim, regardless of its size, increases your insurance premium rate. This means that having some discretion when it comes to filing a claim can save you money.
For example, if you caused a car accident and the damage to the other person’s car was less than the cost of your premium increase, you might not want to file a claim. In fact, paying for the damage out of your own pocket could end up saving you money in the long run.
Here’s why. In auto insurance, premium rates increase by 40% after the first claim is filed and by almost 90% after the second claim, if it’s filed within the next year. These increased premiums last 3-5 years and typically end up being much more expensive than the original cost of the damage.
Should I File an Insurance Claim
The more claims you file, the higher your insurance rate will be. If you file too many claims, the carrier may stop providing you with coverage. Without a policy, you remain exposed to risk until you find another provider, often at a higher cost.
An insurance carrier may also drop you if too many at-fault claims have been filed against you. The riskier you are, the more claims you will file (or will be filed against you), and the less inclined carriers will be to do business with you. So what’s the solution? The best way to avoid higher premiums is to be proactive and create a safer environment so that claims are avoided altogether.
Risk Management Approach Means You Don’t Need to File Claims.
Proactively addressing concerns can help stop your insurance rates from skyrocketing once a claim is filed because it’s less likely to be filed in the first place.
Creating a culture of safety in a business environment
If you are a business owner, there are some good ways to emphasize safety in the workplace to avoid filing claims and rising premiums. Creating business safety policies and emphasizing them is integral when creating a culture of safety. It starts with the ability to:
- Make safety a top priority. This means that profit, productivity, and business growth come second to implementing a safety culture in your business.
- Create policies for all kinds of safety, including reporting safety incidents, reporting near misses, safety training, and safe driving. This means there is something in writing about how to be the safest, smoothest operation you can be. It also ensures that employers and employees are accountable for their safety procedures.
Prepare for emergencies
Create a response plan for:
- Lockdowns
- Severe weather
- Fire
- Medical emergencies
- First aid and AED
Additionally, it is important to implement training in first aid and any other necessary procedures.
Organize the workplace
- Have written and established guidelines for a workplace that is tidy and clean.
- Ensure there are written policies for spill control and the handling of hazardous materials.
Use personal protective equipment (PPE)
- A business owner needs to know the PPE requirements for each specific job and make them known to all employees regularly. This includes making sure your employees know how to use PPE properly.
- Make sure PPE is easily accessible and easily requestable.
Make the workplace ergonomic
- Implement good design when building employee workstations for safety and productivity.
- Rotate employee jobs so they have better productivity.
- Implement techniques for the safe lifting of materials, tools, etc.
Avoid accidents
- Have guidelines for safe equipment usage to help prevent slips, trips, and falls.
Be safe with machinery
- When operating machinery, use task-specific Standard Operating Procedures (SOP).
- Implement a lockout system for all machinery to reduce the risk of operator error and injury.
Take Action: File a Claim
Do not call your carrier first if there is an incident. Instead, contact your agent first so they can advise on the next best steps to take. At POWERS, we have the necessary skill sets to advise you on whether or not you should file a claim.
Most importantly, if you do not have the proper insurance coverage, you will likely lose much more money than you would have with coverage. Knowing what courage you need based on the risks you face is important when considering your coverage.
We don’t expect you to know everything. That’s why the agents here at POWERS can help you comprehensively manage your risks.
Unlike large companies trying to sell you quick and easy insurance in commercials, we want your coverage to last and be cost-effective the whole time. And when you do have an emergency and have to file a claim, you won’t be talking to someone who has taken the time to understand you and what you need from insurance.
Before filing a claim, consulting your agent about the nature of the accident allows them to help you make your best decision based on your past claims, your coverage, and the costs.
Partner with POWERS
Insurance alone is not enough to fully protect your business. Managing risk involves various strategies, with a key focus on addressing your financial risks. The first step is to implement a strategic risk management plan, and we can help! We will conduct a comprehensive assessment of your risk profile to identify the necessary policies for addressing uncontrollable risks.
At POWERS Insurance & Risk Management, we stand by your side. We understand the unique risks that you and your business face. We want to help you understand those risks and prepare accordingly.
Our role is to help you select the insurance product that best suits your needs, ensuring you maximize your policy’s benefits. We will then collaborate with you to develop an integrated risk management plan and empower you to make informed business decisions.
Schedule a free consultation today.
