With insurance rates taking significant increases, it’s important to understand that filing a claim before your confident of coverage may unnecessarily raise your renewal premium, and/or make you ineligible for a better premium with another carrier.
One of the factors insurance companies take into consideration when determining your premium is how frequently you have filed claims in the past. When shopping for a new policy, your loss history can determine whether you are even eligible for coverage. Below is an example of how eligibility for home insurance may be determined by some insurance companies:
-More than 1 claim in 12- months: INELIGBLE
-More than 1 weather and 1 non-weather claim in 36-months: INELIGIBLE
-More than 1 non-weather and/or 2 weather claims in 60-months: INELIGIBLE
Once you file a claim with your insurance company, it becomes a part of your loss history, even if a payment was never made to you. It will show up as a $0 paid claim and will be included in your claim count. So how can you try to avoid filing a $0 paid out claim:
-Get an estimate of repairs from a trusted and reputable contractor/provider
-If you’re unsure whether the cause of the loss is included in your policy coverage, ask your agent for guidance.
-Compare the cost of repairs to your policy deductible and only file the claim if repair costs exceed your deductible. For example, if the cost of repairs is $3500 and your policy deductible is $4100, coverage is not afforded.
You should always file a claim immediately when your property has sustained a large covered loss, especially when your property is susceptible to additional damage. The tips above should only be considered when you are unsure of damage or coverage.