I live in a rented condo unit in the Toronto area. I have a tenants insurance policy. I have it just in case… Just in case something big happens, something like water damage from the people above me, or a burglary, or a big liability incident. I don’t have a tenants policy so that I can make small claims… If someone steals my toaster, I’m not making a claim. This would be the case even if I owned a home rather than living in an apartment.
Herein lies the conundrum with property insurance policies… You pay for insurance for a reason – To cover you if you have an insurable loss. Why then would some people, including me, not put through a relatively small claim?
Here’s why I wouldn’t… As I already said, I have a property insurance policy just in case a big insurable loss happens, something that would make a big financial impact if I had to deal with the loss myself. If someone steals my toaster, that would suck, but it wouldn’t have a big affect on me, financially. So, I wouldn’t make the relatively small claim. Not only that, with home insurance policies, you can’t make an unlimited amount of claims. Eventually, if you make too many claims, your home insurance company will consider you to be high risk and cancel your policy.
Now here’s the other reason that I wouldn’t make a small claim… Making a home insurance claim will increase your rates. Most home insurance policies give you a claims-free discount when you haven’t made a claim in a certain number of years. Making a claim would remove that discount, thus increasing your rates.
But, of course, when an insurable loss happens, Whether to make the claim is always up to you. If you’re already a client of mine, you can call me to discuss what impact this will have on your home insurance rates. If you’re not my client right now, you should definitely still call me to get a car or home insurance quote. My phone number is at the top of this page. I’m located in Toronto, but can quote people throughout Ontario.