In an ideal world, you would make a homeowners insurance claim (and get paid for it without any risk) every time a damage occurred to your house. Unfortunately, things don't work out that well in the real world. Making frequent claims can increase your premiums, get your policy canceled or even make it difficult for you to get coverage. Deciding when to file a claim and when to "let it slide" is not easy, but you should be wary of filing one if:
You Have Made Too Many Claims in the Recent Past
Your insurance company has access to your insurance records via the Comprehensive Loss Underwriting Exchange (CLUE) database. Just like creditors evaluate your credit history, potential insurers will evaluate your claims history before selling you coverage. If you have made too many claims within a short period, then you may find it difficult to get coverage or pay high premiums if you do get it.
The reasoning here is that if you have filed several claims in the recent past, then you are likely to do it again. In fact, even if you are with the same insurer, your premiums are likely to shoot up for the next year. Two or three claims in a decade may be safe, but more than one claim in a three-year period is not wise.
Just Varies Slightly From Deductible
Your insurance company will pay your claim even if it just varies slightly from the deductible, but you won't be doing yourself a great service. Imagine that your claim is $2,500 and your deductible is $2,000. All you will be getting from the insurer is $500, but your insurance claim can increase by 20% to 40% after the settlement. The increase can add up to a significant amount of money after several years.
You Aren't Sure the Damage is Covered
Lastly, you should never file a claim "just to see if the insurer will pay for it." What if you make a claim and it turns out that your policy does not cover the damage? The insurance company will not pay for it, but it will still dent your claim history. It isn't just the claims that are paid that go into your history, even the ones that are denied matter, too.
Therefore, if you make one successful claim and have one denied within a three-year period, you will be in the same position as a homeowner who has had two successful claims within the same period. In short, you will be increasing your premiums without any corresponding benefit.
Always analyze your damages before filing a claim with your insurer. Consider its monetary worth, your deductible, and the frequency of your claims. Your insurance agent like one at http://www.topratedplans.com/ can be of big help when making these analyses.
Share16 December 2014
