Homeowners’ insurance provides peace of mind about your most valuable asset. While some people never have to file a claim, others may suffer many compensable events throughout the life of their insurance policy. Before you file your next property damage claim, it’s essential to understand the effect that multiple claims can have on your rates. Attorney Bill Voss explains how to get the payment you need and prevent prior claims from affecting your record.
Each Claim Affects Your Homeowners' Insurance Rates
There is no limit to the number of home insurance claims you can file, but filing several claims in quick succession could raise red flags with your insurer. Texas law prohibits insurance companies from raising your policy premium after your first claim. However, after that, insurance companies keep close track of the following:
How Many Claims You've Filed
Like auto coverage companies, home insurance providers increase premiums (or restrict coverage) with each claim. A typical home claim stays on your insurance record for five to seven years. If you make two or more claims in five years, your home insurance premiums will likely increase.
What the Claims Were For
Weather-related claims such as wind, hail, hurricane, and flood damage affect your coverage eligibility less because homeowners have little control over the cause of loss. However, multiple weather damage claims can increase premiums if the homeowner does not take steps to prevent further damage.
How Much You’ve Previously Been Paid
Large loss events such as fires or widespread water damage from a burst pipe can increase the cost of your policy.
How Many Claims Were Denied
If you made claims that were filed but denied, an insurer might cancel your policy due to a history of fraudulent claims. You also risk coverage after multiple claims for theft, vandalism, or other causes if you don’t take proper steps to minimize the risk of losses.
Can I Bring My Home Insurance Rate Back Down?
You may need to wait a few years for your insurance history to clear before you see a change in your rate. In the meantime, you could:
Dispute Losses on Your Claims History
A Loss History Report is a record of insurance losses associated with a particular property. Homeowners can access a free copy of their loss history report from the Comprehensive Loss Underwriting Exchange (CLUE) database to examine their claims history for the past five years. Since the loss history report connects to the address rather than the owners, a previous owner's claim might appear on your record. If the previous owner did not request or share this report before you bought the house, your rates could still be affected.
Install Safety Features
If your rates increased due to multiple claims, you might be able to save costs by installing cameras, fences, fire-suppression systems, or other safety features on your property.
Check Your Discount Eligibility
Many insurers offer discounts for paying a policy in full, increasing your credit score, and making upgrades to the home that prevent significant losses.
We Help You Get the Property Damage Coverage You Need
When deciding whether to file a claim, there are two things to consider: the cost of the damages and your insurance deductible. Generally speaking, homeowners should file a claim if the repairs cost three (or more) times the deductible. The numbers should be precise, so a professional must appraise the damages before you file your claim.
If your insurance company refuses to pay for all of your losses, the Voss Law Firm can help. Call us at (888) 614-7730 or complete our contact form today to get answers to your questions, or start reading your copy of our free book, Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse, and Refuse.