How Home Insurance Policies May Change After Filing a Claim
Your Home is a significant asset. Looking over your home insurance policy can become complicated as you seek to ensure enough coverage. However, accidents can still occur when you least expect them. Here is a look at how to proceed after filing a home insurance claim.
People purchase home insurance to protect their homes against potential accidents such as fires, thunderstorms, and other natural disasters. The policy covers both your home’s interior and exterior structure against potential damages. Home insurance policies also include liability coverage, which protects you if your pet dog injures someone or damages property. You’re also covered if a guest slips and falls on your property; liability coverage will take care of their medical treatment.
In some cases, policyholders opt to switch companies during the claims process. Insurance companies also can cancel a customer’s policy, forcing them to seek coverage with another insurer. Before deciding which path to take, research different factors that may impact your ability to purchase new home insurance coverage.
Some Common Reasons Why Insurers Cancel Policies
The goal for companies is to earn profits from writing policies, collecting premiums, and then making good investments with that income. Handling claims cost insurance companies money, so insurers may cancel policies if people make frequent claims. Research shows that most homeowners only file a claim around every 10 years. If you file multiple claims in a five-year span, you may have your policy canceled. At the minimum, you can expect your premiums to increase.
Be aware that insurers share claims information throughout national databases. Suppose you apply for home insurance with another carrier. In that case, the insurer will check databases such as A-PLUS and the Comprehensive Loss Underwriting Exchange and look at your claims history. This helps carriers decide whether or not you are a high-risk applicant. The carrier may deny your application or cause you to pay higher premiums. You won’t be able to hide previously filed claims from your new carrier.
Verifying Database Accuracy
Since insurance companies frequently access databases to find out information on new applicants, be sure to obtain a copy of your most recent report. Look over the report thoroughly to ensure that there aren’t any errors. Your CLUE report is based on your credit history. Review your credit report every year to ensure that all of your information is correct. If you notice an error on your report, you can file a written dispute.
Things to Consider
Pay attention to your deductible. Your deductible is the amount of money you are obligated to pay on a loss before your coverage steps in. If you increase your deductible, that lowers your premiums, which can help you save money long term. Check with your current or new insurer about your deductible. If you have an expensive home, think carefully before making a decision, as it may cost more to cover repairs if your home is damaged. Most homeowners can save thousands of dollars every year by raising their deductible without filing a claim.
Look over your home insurance policy and assess your options. Generally, filing a claim isn’t an issue unless you’ve filed multiple claims in a short period. If you have any questions about your policy, the team here at Little & Sons Insurance Services will assist you.