Maybe you didn't realize the damage to your home was quite as bad as it is. Maybe you were extremely busy and just couldn't find the time to report that minor fender-bender. Maybe you thought it wasn't a big deal if you didn't report your claim right away. Guess what. If you do not report your claim to your insurance company in a reasonable time frame coverage can be denied.
Why Do I Have to Report My Insurance Claim Right Away to the Insurance Company?
An insurance policy is a contract between you (the insured) and the insurance company. The contract itself is your policy that details exactly who is responsible for what and when. It is very black and white so it is critical to understand what can make or break the outcome of a claim within the policy itself.
Whether you have a NH car insurance policy, NH homeowners policy, NH commercial policy or any other property or liability policy, the top condition listed within the policy itself is giving prompt notice of the loss or damage to the insurance company. This requirement is typically listed under the "Conditions" section or "Duties after an Accident or Loss." It may also go on to explain that the insurance company has no duty to provide coverage under the policy unless there has been full compliance with the duties listed including prompt reporting.
What is the Big Deal If I Don't Report My Property Insurance Claim Right Away?
Though it may not seem like a big deal to wait to report a claim, the insurance company has every interest to ensure no further property damage is caused by not reporting a claim. Think about these situations to get a better understanding:
1. A shopping cart rolled into your car door and scratched it. You weren't going to file the claim but now there is rust so you would like to open a claim. Outcome: Claim denied as rust only occurred because of the delay in reporting the claim and car not getting fixed .
2. The water heater in your home burst and seeped into the finished area of your basement. You sopped up the water, but never got around to filing a claim as the towels appeared to have done the trick. Six months later, you cannot get rid of the smell of mold out of the dry wall and carpet. You decide now you better file the claim. Outcome: claim denied given mold appeared due to not properly drying out basement. Had a claim been filed, additional damage would not have occurred.
Why is it Critical to File a Possible Liability Claim Right Away?
Most personal and business policies provide coverage for legal defense in case of a liability claim. This coverage can be invaluable given the cost of attorney fees. If you change your thinking of your insurance company also being your lawyer, you begin to understand why it is so important to report any possible liability claim immediately to your insurance company. The insurance company wants every opportunity to defend you and it can take time. If the insurance company does not have time to properly defend you then your claim may be denied. Consider this situation:
You are a NH business owner and you receive a letter saying someone slipped and fell in your parking lot. You ignore the letter because you take very good care of your parking lot and think it is a scam. Later you receive a formal letter from an attorney, but you ignore it because you are way too busy to deal with this nonsense. You then get a subpoena indicating you are required to appear in court to defend yourself in a couple of weeks. You then decide you better file a claim with your insurance company. If your insurance company cannot investigate the claim properly due to a time restraint, they do have the right to deny coverage.
At HPM Insurance we have also seen a few clients over the years completely ignore letters and subpoenas from the court and simply don't show up in court when required. This typically results in them losing the case and hence having to pay damages. If the insurance company never had the opportunity to defend the insured, they would not contribute to paying the damages, whether legitimate or not.
Sound Advice on Claim Reporting:
Insurance is complicated and you certainly don't want your premiums to increase unnecessarily by filing a seemingly frivolous claim. That said, if you have a claim and you are not sure you should file it or not, talk to your insurance representative. They can at least review your options, coverages and deductibles so you can make an informed decision on what you should, or should not, do. A ten minute discussion with your agent could end up saving you thousands in the long run.
This material is for informational purposes only. All statements herein are subject to the provision, exclusions and conditions of the applicable policy. For an actual description of all coverages, terms and conditions, refer to the insurance company.