Insurance; love it or hate it, sometimes it’s a necessity we all have to deal with. In most states some of it is mandatory, whether it’s car insurance or homeowners insurance.

Neon Insurance Office Sign
Creative Commons License David Hilowitz via Compfight

The best thing about insurance is that it’s there to help us out when we need it. The worst thing about insurance is that it might not help us at all, and putting in a claim might backfire on us in some way.

No one ever tells us about the prohibitive part of insurance. Almost none of us read all the fine print in our insurance policies because of the way they’re written, and insurance companies count on that. Their job isn’t to help us at all; their job is to make money and protect the company against liability.

They won’t like this but it’s true. Want to know why? Here are 3 times where putting in some type of claim might be a detriment to you.

1. Putting in a claim for damage to your home could be a nightmare. A few years ago I put in a claim from storm damage where it impacted the inside of the house. The first guy awarded us half the amount of our lowest bidder. When we appealed, the second guy came in and took care of us; that was nice.

However, two other times we not only got denied, but were warned that if anything happened after that and it was related to those incidents, they wouldn’t be paying anything at all. One involved a potential liability to the rest of the house; the other presented possible injury to visitors. On the second one, if someone got hurt and they sued the insurance company, they would not only deny the claim but possibly cancel our insurance.

For both issues, it cost us a lot of money to fix things, but we knew it had to be done. And there’s still a possibility that after our last claim, which once again was related to weather, that they may still drop our coverage; stay tuned.

2. Putting in a claim for damage to your car can be dicey. Overall it’s related to two things.

The first is how much more it will cost you beyond your deductible. If your vehicle is totaled it makes sense to put in that claim. If someone else hit you the same thing applies.

However, if your car suffered what’s known as cosmetic damage and you put in a claim, they won’t take kindly to that. If any damage isn’t at least $1,000 more than your deductible they’ll look badly at that also.

Finally, if you were the cause of the damage, and they have to pay for your damage and damage to someone else… it’s probably smart to start looking for another insurance company before you get dropped. Turns out it’s harder to get insurance if you’re dropped, both for car and homeowners insurance, because it becomes part of an official record that all insurance companies share with each other. Doesn’t sound fair does it?

3. Health insurance is kind of a different matter. Most of the time you’re going to want to use it, especially for all appointments, lab and radiology work, and any other procedures. Even if you have deductible amounts it turns out that many insurance companies have fee schedule amounts that health care entities have agreed to, so the amount you’ll owe will be much less.

Where things can get complicated is with things such as certain medications or medical equipment. For instance, if you have a CPAP and you’re using insurance, you can only get things whenever your insurance company will authorize it.

Thus, if you went to a store that sells these things and you wanted to replace your mask, if you got one within the last 3 or 6 months, depending on your insurance, they won’t sell one to you, even if you agree to pay out of pocket. In some states, even the smallest item, like a filter, is considered medical equipment and is under a schedule.

If you never get your equipment by using your insurance you might pay a little bit more, but you can buy whatever you want whenever you want. That applies to medical devices anyway.

What about medication? Last year I wrote about medications you can buy locally and get great deals on if you shop around. Walmart sells their own insulin at a great price. You can get a better deal if you show your insurance, but you can only refill it based on the schedule and having a prescription in place.

If you don’t mention insurance to them, not only can you buy insulin whenever you want but they’ll also sell you syringes, which most drug stores won’t do, and they’re at a pretty good price also. It’s possible there are other medications where they’ll do the same if you don’t share insurance information with them, but I’m not on anything else where I can check this out.

Be smart by checking these things out in advance. Luckily, if you call you don’t have to give your name to get information from any of these places. I want to make one thing clear though. If you’re thinking about putting in a claim for your car or your house and your agent seems like he or she is trying to talk you out of it… take that seriously.

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