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What is the Broker’s Role in a Claim?

About 1 in 20 homeowners have a claim each year. On average, auto insurance claims happen about once every 18 years. Claims are not an everyday occurrence for individual policyholders, so the process can seem daunting. For many, the first instinct is to contact their broker. Your broker can be a valuable resource if you have a claim, but ultimately, your claim will be handled by specialists called claim adjusters.

Reaching out to your broker is a wise decision. Your broker can direct you to where you can get the help you need with your claim. A broker will review your policy, advise of coverage if such an assessment can be made on the broker’s end, depending on the information you provide.  They will review deductibles, explain the basic claims process, and will explain the impact of a claim on your insurance.

If you decide to place a claim, the broker submits a claim notice to your insurance company.  Your insurer’s claims department will assign an adjuster to contact you, review and collect more information, when necessary, about the loss and determine the amount of the loss. Often, the claims department can also help with mitigation while the claim is being processed. For example, if your home’s roof is damaged, they might send a local contractor to help install a tarp to keep the weather out and reduce further damage.

The role of the broker does not stop at reporting the claim. If you reach a roadblock, your broker may be able to point you in the right direction to keep your claim moving along. Your broker is there for you if you feel you are being treated unfairly or if the lines of communication between the client, the insurance company or other parties involved are starting to deteriorate. 
 
Everyone plays an important role. Your broker specializes in examining risk and helping you understand your coverage. Your claim adjuster specializes in getting the damage fixed, explaining the settlement and making you whole in accordance with your policy. Questions regarding repairs and settlement should be directed to your adjuster.  Be sure to have their name, phone number, email and claim number.  Your broker can provide you with this information.

If the claim happens after hours, click here to our website that lists our insurance company's emergency claims numbers.

Fortunately, claims are less common than many of us think. The time to ensure you have the right coverage in place is before you have a claim. If you have not reviewed your coverage recently, just reach out to us for a policy review. You will thank yourself later if you do have a claim.
 

Need to File a Claim? Here‘s Your 4-Step Quick Start Guide!

Of course, it’s no fun to experience a loss that requires you to file a claim. But, when it happens, it’s good to know there’s a hassle-free process in place that allows you to recover from the loss as quickly as possible.
This 4-step quick start guide will let you know what to expect from start to finish when you file a claim. 
 
Step 1: Call Your Broker

One of the many benefits of working with an insurance broker is the personalized attention they offer when you need to file a claim. Your broker will guide you through the entire filing process so he or she should be the first call you make after an incident.
 
Step 2: Keep Your Phone Nearby
After you file a claim, a claims adjuster will contact you to briefly discuss your claim, explain your coverage, and go over the next steps. This initial phone call is an important step in getting your claim processed quickly, so keep your phone handy.
 
Step 3: Assist With the Claims Review
After speaking to you, your claims adjuster will investigate your claim. They may have additional questions about the information you provided in your claim so keep your notes and any relevant images regarding the incident somewhere you can easily access them. Storing this information on your smartphone is a great way to ensure you have all the details when you need them.
 
Step 4: Review Your Settlement Offer

After investigating your claim, the adjuster will let you know his or her determination including how much they will pay for your loss. If you are not pleased with the settlement offer, keep in mind that you have options for disputing the determination. Your insurance broker can walk you through those options and offer some help, including having discussions with the adjuster and supervisors.

Remember, if you hit a snag during any of these steps, we are here to help. We’ve assisted numerous clients as they navigate the claims filing process, and we are happy to do the same for you.

How Does My Deductible Affect My Claim?

Most types of insurance use a deductible, which refers to the part of the claim that you pay. Often, you will have the option of choosing the deductible yourself. Many insurers offer several choices. However, it is important to choose an amount that fits both your coverage goals and your budget.
 
Let’s look at an auto insurance example. Many policies have separate deductibles for collision and comprehensive. However, you are only likely to have one of these types of claims at a time, so we can use a collision claim to explore the effect of the deductible.
 
Let’s say you chose a $2,500 deductible to keep premiums lower. One sunny afternoon, you bump into a parking light post in the grocery store parking lot. The damage looks minor, but today’s cars often pack a lot of expensive high-tech gadgetry into the bumper. The shop estimates the cost of repair at $3,000. In this case, your policy will cover the claim because you purchased collision coverage. However, the insurer will “deduct” $2,500 from the claim payout, paying $500 for the $3,000 repair.
 
Chances are good that you saved some money on premiums by choosing a higher deductible, but it is also important to keep money available to cover the deductible, especially if you choose a higher deductible. Always try to choose a deductible that you will be able to pay comfortably. In some cases, a smaller deductible may be the more prudent choice.
 
Home or business insurance policies also use deductibles. For home or business policies, the range of choices may be even higher than you will find on auto policies, which can put more of your money at risk if you do have a claim. The decision is yours according to your needs and the needs of your family. Some policyholders prefer a larger deductible (and lower premiums) while others prefer to play it safe and keep the out-of-pocket risks lower.
 
Most insurers recommend that you review your coverage about once every 12 to 18 months. If you have not reviewed your coverage lately, now is a great time to go over your deductibles and any other changes you might need to make. Just reach out to your broker to schedule a time to customize your policy to fit your needs.

How do insurers determine if a vehicle is a total loss?

Auto insurance can be tricky to understand, particularly when it comes to the estimated value of your vehicle at the time of an accident. The amount you paid for your vehicle and the amount you owe on your vehicle may or may not have much relationship to the value of your vehicle.

Here are some factors that determine the value of a vehicle at the time of a loss and how an insurer determines if a vehicle is a total loss after a claim.
 
Depreciation plays a big role
 
On average, vehicles depreciate by 20% to 30% in the first year. Depreciation slows after the first year but during the first five years of ownership, it isn't unusual to see the value of your vehicle drop by up to 60%.
 
Again, an important thing to remember is that the value of your vehicle at the time of an accident is not based on the amount you borrowed or the amount you paid. Although you certainly can have a discussion with your claims adjuster on what your vehicle cost you.  With almost all vehicles, depreciation reduces the value of a vehicle each year.

For example, a car that costs $35,000 new might be worth $28,000 after a year. In most cases, insurers will look at the value of comparable vehicles in your area. Depreciation rates can also vary by make and model. Some vehicles depreciate faster than others.

When you have purchased a new vehicle (as in year) be sure to discuss the Waiver of Depreciation coverage to prevent depreciation in the event of a total loss. 
 
Calculating a total loss
 
Newer vehicles are less likely to be a total loss because the value at the time of loss is higher. Instead, let’s look at a vehicle that’s 5 years old. Many vehicles have depreciated by up to 60% at this point, meaning that a $35,000 vehicle (when new) might have a value of about $14,000 when it’s 5 years old.
 
While the value is probably around $14,000, an accident that causes less than $14,000 in damage might still cause the vehicle to be a total loss. This is because the costs of repairs are an estimate. It isn’t uncommon to find more damage when the body shop starts taking things apart to replace damaged parts.
 
Many insurers set a cutoff at 70% to 80% of the value to determine a total loss. In effect, they’re pricing in the cost of overruns and hidden damage. With an 80% cutoff, a vehicle valued at $14,000 might be a total loss at just $11,000 in damage. For insurers that set the cutoff closer to 70%, the vehicle might be a total loss with only $10,000 in damage.
 
A total loss can still be a paid claim.
 
When a car is totalled, it doesn’t mean you’re out of luck. It simply means it isn’t economical to invest money in the repair – at least from the insurer’s standpoint. In most cases, if you’ve purchased coverage for the risk, you’ll get a payout on the claim.
​However, the insurer will probably keep the damaged vehicle. In exchange, you’ll be paid for the value of the vehicle minus your deductible if applicable. 

Is Your Coverage Enough To Replace Everything You Own?

If you lost everything you own in a fire tonight, would your current property insurance be enough to cover your total loss? Usually, there is more than enough coverage on a homeowner’s policy, as the value is on average 80% of the insured value of the home.  But for tenants or condo package, you pick the limit of coverage. 

By taking the steps outlined below you can have peace of mind that, if something unfortunate ever occurs, you have an accurate inventory of all your belongings and have enough coverage to replace them.

KEEP AN INVENTORY LIST
 
Catalog your possessions and what they are worth. Six easy ways to keep an accurate record include:
 
- Snap a photo — smartphones and digital cameras make this easy.
 
- Take a video tour — use the video on your smartphone or camcorder to capture your belongings room by room.
 
- Write down the details — support your visual record with a written list that offers details on serial numbers, make, model and any other pertinent information.
 
- Save receipts for high-dollar purchases.
 
- Update your list annually and when you make a major purchase.
 
- Keep your inventory records in a safety deposit box or other secure location outside your home.
 
*Smart Tip*:
Update your inventory list on your annual policy renewal date.
 
CHECK YOUR COVERAGE

 
If anything is certain it‘s that things change. The initial limit you selected for your insurance policy was based on the belongings you had at that time. But as time passes, you buy new things and get rid of others.

Ask yourself these five questions when checking your coverage:

- Would the estimated value shown on your policy pay to replace everything in your home today?
 
- Have you taken into account the cost to replace your items at current prices?
 
- Have you included the cost to replace less obvious things like clothes, kitchen appliances and tools, air purifiers, portable electronics (tablets, MP3 players, laptops, gaming consoles and accessories) and furniture?
 
- Have you factored in the cost to replace antiques and other unique valuables? If so, be sure to add them to your policy with a certificate of appraisal.
 
- Does your policy have coverage limits for computers, bikes or jewellery? If these limits do not cover your items, talk to your insurance broker about adding options that protect you.
 
While it is tempting to save money on premiums by reducing your coverage, doing so can end up costing you more if a tragedy occurs that results in the loss of all your possessions. It is worth spending the extra few dollars each month to ensure you have adequate coverage when it counts.
 
Smart Tips:
 
- Include taxes when you update your inventory.
 
- Change your policy immediately if the value of your belongings is greater than the value listed on your policy.
 
- Do not over-insure or under-insure your possessions.

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