The importance of using your insurance for large losses versus small ones

Using insurance for large losses rather than small ones can be financially prudent for several reasons:

1. Cost Control: Insurance premiums are often influenced by claim frequency. Making small claims frequently can lead to higher premiums over time. By reserving your insurance for significant losses, you can avoid frequent claims and potentially keep your premiums lower.
2. Financial Protection: Insurance is designed to protect you from major financial setbacks that you couldn’t easily cover out of pocket. Using it for large losses ensures that you have the necessary support when faced with significant expenses, such as major property damage or liability claims.
3. Avoiding Rate Increases: Insurance companies may raise rates or even cancel policies based on claim history. By minimizing small claims, you reduce the risk of negative repercussions on your coverage and premiums.
4. Maintaining Coverage: Insurance is most valuable when it’s available for catastrophic events. Using it sparingly for smaller incidents ensures that your coverage remains intact and robust when you truly need it the most.
5. Deductible Considerations: For many policies, there’s a deductible that you must pay before insurance kicks in. It’s often more beneficial to handle smaller losses within your deductible amount and save your insurance for larger expenses where the coverage will have a more significant impact.

Overall, the key is to strike a balance between using insurance when necessary for substantial losses and managing smaller expenses independently to maintain cost-effectiveness and coverage stability.  If you have any questions in regards to a potential claim, please call our office at (425)212-3505 to discuss the claim and its potential impact on your insurance.