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To Claim Or Not To Claim

Discussion in 'Business Fundamentals' started by Pelican, Sep 25, 2003.

  1. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    That is my question.

    OK, enough of the drama.:rolleyes:

    Here's my situation:

    Last season I slid into a stuccoed driveway column and scraped it. I left the customer a note plus notified her in her following invoice that I had done the damage and would hire the contractor to repair it. I never heard anything back from her about it other than she would let me know.

    Today I received an invoice from the company she hired for just under $500. I called my insurance company and they explained there would be no deductible for this claim, the full amount would be paid. She also advised my premium is based on the number of claims I file, this would be my first in seven years of doing business.

    Would this put me at risk for a significant rate increase or possibly being dropped? I know this is what insurance is for, but in the scope of things this amount is not a lot at this time. It would be tax deductible as a business expense as well.

    One more item, this client still owes me payment for plowing, I didn't press the issue until we resolved the damage assessment. I have an opportunity to deduct the payment amount from the contractor invoice.

    Those of you who have experience with insurance claims, what would you recommend?
  2. cat320

    cat320 2000 Club Member
    Messages: 2,222

    I would recomend paying it out of your pocket if the insuranse will not pay any of it out because you have a high deductable ,not worth getting the primeums increased if it was more they would probably drop you.So now that she just went and got it fixed with out you getting the contractor to do it send her your invoice with that amount deducted from it.Question are you gonna plow her this year? If not then see what some one would charge for the work and just send her that amount after she pays you or explain that you were waiting for her to get back to you and never did and you had some one to do it for less.
  3. BWhite

    BWhite Senior Member
    Messages: 496

    I guess you have to save the insurance for the big accidents . If the amount is in the ballpark I would pay it . If its out of line then she should get the standard three quotes . or maybe you can send her your 3 quotes Bill
  4. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Your better off to pay that one. I think anything 500 and under is better off out of pocket. However i would also give a limit on how long you are leaving an open window on repair cost.

    Next time I would agree to pay in the following manner:

    Will pay 100% before July 1st
    Will pay 75% before Aug 1
    Will pay 50% before sep 1
    Will pay 25 % before oct 1
    will pay 0 after nov 1.

    I picked July because this type of repair is normally not possible to after April 1st. 90 days gives the customer plenty of time to have the repairs completed and invoiced.

    The reason I put a limit on this is, who is to say in April that her Uncle John didn't hit the same post doing further damage. You paid to fix your damage and her Uncle Johns.


    JD PLOWER PlowSite.com Veteran
    Messages: 751

    I have to agree. Pay it. Its a no win situation for you. As far as deductions go I would personally do that also as Cat posted, unless you think she'll have a problem with that and you want to keep her as a customer.
  6. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    I've discussed this with my insurance agent. As you noted, a lot depends on the number of claims. BUT, over a seven year period isn't likely to help. It'll usually be based on the number of claims within any 12 month period. They assess points based on the type of claim. The number of points at renewal determines raised rates, non-renewal etc. Based on what you said about this not being a significant amount to you and that you could deduct it as an expense, I'd say pay it out of pocket. BWhite said it - save the insurance for the big stuff.
  7. wyldman

    wyldman Member
    Messages: 3,265

    I'd pay it out of pocket too.If you then need to claim something big,you can.
  8. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    All these replies are along the same lines I was thinking, just wanted other opinions. Insurance is a necessary evil, it seems ridiculous to pay out and be afraid to use it. Thanks everyone!
  9. BRL

    BRL PlowSite.com - Veteran
    Messages: 1,277

    "Insurance is a necessary evil, it seems ridiculous to pay out and be afraid to use it."

    This is crazy isn't it!!

    See cutntrim's insurance post below this one for another vote to pay it out of pocket. I say if you can handle it now pay it, cause you never know when a situation may come up that you will have to claim. And you never know when the one after that might come up either.