Deciding When to Report a Loss to Your Insurance Company

As a business owner, you might occasionally face situations where you suffer a loss and wonder whether to report it to your insurance company. Reporting a loss can seem straightforward, but the implications on your future premiums need careful consideration. Here's a straightforward guide to help you navigate these decisions.

Firstly, for significant claims, reporting is generally advised. Insurance is designed to protect against large financial impacts, which is precisely why we invest in coverage. For major claims, the benefits you'll receive, including legal protections, will typically outweigh any potential increase in premiums.

Secondly, if the claim involves bodily injury, it’s crucial to report it immediately. The consequences of delayed reporting can be severe, including the denial of the claim and substantial legal costs that can escalate quickly. Medical bills alone can be financially overwhelming.

Thirdly, claims involving damage to someone else’s property should also be reported, especially if the damage is substantial. Insurance companies specialize in managing these disputes efficiently. If you choose to handle such claims independently, ensure the claimant signs a comprehensive Waiver and Release before any payment is made. This step helps avoid future demands for additional compensation.

Fourthly, if the claim involves minor damage to your property and is near or below your deductible, consider handling it without involving your insurance. Smaller claims can often lead to premium increases that exceed the cost of the claim itself. However, it's wise to get a repair estimate first, as initial inspections can underestimate repair costs.

To minimize insurance costs long-term, implementing robust loss control measures is essential. At Mobile Insurance, we offer resources like Self Inspection Reports available on our website ( under the "Loss Control" section. Investing in loss prevention can yield significant savings—statistics suggest that every dollar spent on loss control saves ten dollars in potential costs.

Remember, the goal of insurance is to provide peace of mind and financial protection for significant risks. Evaluating the cost and impact of each claim carefully will help you make informed decisions that align with your business’s financial health and security.

Frank Rolfe has been an active self-storage investor for around two decades, with self-storage units in many states throughout the U.S. His nuts and bolts knowledge of what makes for a successful self-storage facility has led to a three-decade career without a single failed property.