Small claims for storm repairs could prove costly

7/4/2012

COLUMBUS -- A homeowner should, of course, file an insurance claim if one of the weekend's storms ripped a tree from its roots and sent it crashing into the house, causing thousands of dollars in damage.

But if that tree knocked down part of a fence or a power line that left a refrigerator full of rotten food, the homeowner might want to think about absorbing that cost instead of filing a claim, industry representatives say.

Filing too many claims over too short a period can lead to rate increases or worse, an insurer that chooses to not renew a policy, they said. Their advice: Talk to your agent before filing a claim in which the payout beyond the deductible might be only a few hundred dollars.

"If you want a claim, go ahead and turn it in, but down the road, it can be held against you," said Dan Rabold, one of the owners of the Thompson-Cunningham Agency in Worthington, Ohio.

There is no rule of thumb on how much a homeowner should try to bear, said Mitch Wilson, a spokesman for the Ohio Insurance Institute, an industry group.

"It's really up to each individual," Mr. Wilson said. "Where do I stand financially? Can I afford to absorb the $200, $300 or $500 claim?"

Ron Mooney, owner of RHK Group, an independent insurance agency in Dublin, Ohio, agrees that frequent claims can be a problem, but it can be more complicated than the number of claims a homeowner files.

Losses from the recent storms probably would be labeled by insurance companies as catastrophic, meaning they might not count a claim from the storm when it comes to rating a policy.

That loss, however, can be counted if there have been other kinds of claims, he said.

Each insurer has its own rules on how it judges policyholders, Wilson said.

State Auto, which sells policies through independent agents, emphasizes that insurance is meant for catastrophic claims, said Joel Brown, the insurer's vice president of standard lines.

"We encourage larger deductibles so insureds don't submit smaller, maintenance types of losses," he said.

For homeowners who have suffered severe losses from the storms, other help beyond insurance protection might be available.

State law allows county auditors to reduce property values, and property taxes, for homes and businesses that have been severely damaged, Franklin County Auditor Clarence Mingo said.

Applications for a reduction can be found at most auditors' Web sites.

Also, homeowners and small-business owners hurt by the storms could be eligible for emergency assistance in the form of reduced interest rates on loans under a state program from Treasurer Josh Mandel.

For more details, go to www.ohiotreasurer.gov/renewrebuild or call 614-466-6546.