Insurance - To file a claim or NOT to file a claim?

Question

One of my rental properties suffered water damage and I'm wondering if I should file an insurance claim or just eat it...? I've never filed an insurance claim on a rental property, so I do not know what impact filing a claim will have on my insurance rates for this property and other rentals that I have insured with the same and other companies. The event was triggered when a polybutylene pipe feeding the upstairs bathroom burst over the living room ceiling while my tenant was at work. So for hours water rained down, damaging the living room ceiling, carpet / padding - and drained down to the basement, damaging the drop ceiling tiles, insulation and more carpet / padding. It does not appear the sub-floor or walls were damaged and no apparent mold. It will all be fixed for between $4,500 to $6,000 and my deductible is $500. I've also got a plumbing bill for fixing the pipe that is not covered by insurance. To file a claim or NOT to file a claim?

Joseph Byrnes · Answer

The very first thing you should do is call your agent! I cannot stress that more than anything you will do when you have damage. As @Tony Wilcox said it's not the policy you have today to worry about its the one you'll need later or when you renew. Even in your personal insurance like home or auto you should always reach out to your agent they will explain what could and will happen. Calling their number is better than calling the claims number. Also you and your agent should be talking to each other at least once every six months, things change and your policies may need to change with them... Sorry if this sounds like an advertisement. Your agent is the buffer between you and the insurance company and they are going to be the one to help fight for you.

Brendan McElligott · Answer

I had hail damage to my rental property's roof a few years back. I filed a claim and got the whole thing paid for by the insurance company, not a dollar (other than the deductible) out of my pocket. It was smooth and I was happy with it. As far as I know, it didn't affect my premiums at all. But best source of information would be to call your insurance and get an answer straight from the

Tony Wilcox · Answer

You can never really know how it will impact your rates. All I can say is that it will. Mainly it will impact your insurance score which is a major factor in determining the rate. You wouldn't see anything until renewal, or if you went to buy another property. Now it might not change hardly at all, or it could raise your rates by $20/month, or more. There is just no way to truly know until renewal.

Peter Mckernan · Answer

@Jonathan Taylor Smith

I had an angle stop break in a back unit 500sf on a property last year, it was flowing for about 2 hours before they caught it. They called me at 8 at night, we got ahold of insurance because it had flooded the whole bedroom, closet, some of the kitchenette, and bathroom. To make sure we had all our bases covered we called insurance, they sent a restoration crew out there to do full mitigation, cost $20,000 and my tenant was worried about mold etc. The best option in that case was do the full rollout of insurance to make sure they did not come back and say that there maybe mold in the walls. This process with restoration, ordering materials and everything took about 5 months, but all was covered and only $500.00 out of pocket expenses. If it was something small would say get it paid for out of pocket.

The only thing is that you cannot get prime rates within 3 years of a claim if buying another property/rental, so we had a little higher expense when it came to buying another rental in the same year (only about $10 more a month). Our premium never went up on our property, it is $78.00 a month and has been that price for about 2 years (leak was March of last year).

Insurance - To file a claim or NOT to file a claim?

Insurance - To file a claim or NOT to file a claim?

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