Would you file a claim?
Scenario: In 2024, a condo owner was able to successfully challenge a non-renewal decision from their condo insurance, which occurred a few months after they filed a $13,000 claim for storm damage in late 2023. Now, the owner is facing some limited water damage to their walls and hardwood floors, caused by fire suppression efforts after a fire from a neighboring building spread to theirs. Additionally, they are unable to stay in their apartment for an estimated 2-3 months due to damage in the common areas. Unfortunately, their condo association does not cover alternate living expenses. The condo owner is concerned that filing another claim with their insurance provider might lead to a non-renewal, this time permanently. What would you recommend they do?
In this situation, the condo owner faces a tough decision. Here are some points to consider before deciding whether to file an insurance claim:
Assess the Damage: Evaluate the extent of the water damage and the cost of repairs versus the potential claim amount. If the damage is significant and the costs to repair exceed your deductible, filing a claim could be justified.
Living Situation: Since the owner cannot live in the apartment for 2-3 months, consider the financial burden of temporary housing versus the risk of filing a claim. If the cost of living elsewhere is substantial, it may be worth filing.
Insurance History: A recent claim can indeed raise flags for insurers. However, if the current damage is substantial, the risk of being non-renewed may be outweighed by the need for coverage.
Consult the Insurer: It might be beneficial to have a conversation with the current insurer to understand their policies regarding non-renewals after claims, especially considering the recent appeal.
Document Everything: Regardless of the decision, ensure that all damage is documented thoroughly. This will be helpful if a claim is filed later or for any potential disputes with the insurer.
Consider Other Options: If non-renewal is a significant concern, the condo owner could also explore other insurance providers who may be more accommodating and willing to provide coverage despite recent claims.
Ultimately, if the financial impact of not filing a claim is too high, it may be prudent to file while being prepared for any potential outcomes. Seeking advice from an insurance agent or an attorney specialized in insurance matters could also provide additional clarity and tailored recommendations.