To Claim or Not to Claim, That Is the Question

Unfortunately for me, the first coastal storm of the season arrived early this year. It spun up out of the Atlantic last weekend with little warning and struck the coast near our vacation home with 80 mph winds. I hadn’t yet winterized the property, and that was my mistake. Some of the patio furniture was still out, and one of the large storage lockers hadn’t yet been strapped down to its anchor bolts.

When I arrived yesterday, I discovered the locker had traveled about 150 feet before bursting open and scattering its contents beyond recovery. The patio furniture no longer qualifies as a set. The total loss is roughly $5,000.

Property insurance is non-negotiable. But owning a policy and using it are separate decisions, and the second sometimes deserves a bit of thought.

Should I claim? Instinct says yes, and the arithmetic agrees. With a $1,500 deductible, the most I could recover is $3,500. Suppose a claim raises my $2,000 premium by 25%, or $500 a year.

If the surcharge lasts three years, I pay back $1,500 and come out $2,000 ahead. At five years, I pay back $2,500 and come out $1,000 ahead. The break-even point is seven years. On paper, claiming wins.

But the paper leaves out three things. First, few carriers will write a policy on a coastal home in a region prone to Atlantic storms, especially one that sits empty for periods, so a claim could mean non-renewal and a scramble for coverage at a worse price. Second, 25% may be optimistic for a property insurers already regard with less than enthusiasm.

Third, the payout itself could come in below $3,500, given possible limits on outdoor items or questions about whether an unwinterized, vacant property affects coverage. Weighing those risks against a potential gain of $1,000 to $2,000, I’d rather not test my insurer’s patience over a loss I can afford.

I’m not seeking sympathy. Owning a vacation home is a privilege, and I can absorb this loss. It will sting, but I can cover it, so I won’t be contacting my insurer. I keep the policy for the catastrophic loss, the kind that would genuinely hurt, and I pay for the smaller ones myself.

Every storm has a silver lining, and mine arrives in spring, when I get to trail several paces behind my wife, Suzie, as she selects new patio furniture. I will nod at appropriate intervals and offer no opinions, having recently forfeited any claim to good judgment on the subject of outdoor furnishings.

There’s also a certain irony in all this. I’m at the vacation home this week helping organize the spooky Halloween festival and fireworks display we provide for local residents and the children of the district, so I suppose it’s the perfect time for a small property nightmare. One thing is certain, though: I will be fully winterizing before we head home, because I have no wish to see the sequel.