Is it True That a Home Insurance Claim Will Count Against Me?

When you purchase insurance, regardless of whether you buy a home, auto or health insurance policy, you do so with the expectation that if and when you have to file a claim for a repair, the company will process the claim quickly and that will be the end of it. Unfortunately, things don't work that way in the world of insurance.

This is why it is so crucial that you ask as many “what if” questions as possible when you are talking to an insurance agent about the specific type of homeowners insurance policy you need.

Things You Can Do to Keep Your Premiums Down

Every home or condo owner or apartment renter should know what they can do to keep their insurance premiums as low as possible.

• Installing an alarm system can lower your premiums.
• Having smoke, radon and carbon monoxide detectors can also help to lower your premiums.
• Opting to have a higher deductible can help to lower your premiums.
• Bundling your home and automobile insurance policies – or purchasing them from the same company can lower your premiums.

How Insurance Companies Determine Your Rates

An insurance company will definitely look at your claims history in determining your premiums. Some of the things they may consider include your location, and how prone the area is to catastrophes such as hurricanes, flooding, earthquakes and tornadoes, the repair costs in the area, and the overall construction of your home.

Without a doubt, the more claims you file against your homeowners insurance policy, the more likely it is that your insurance company will punish you by raising your rates. They may even choose not to renew your policy if you file too many claims.

Not All Claims Are Grounds for Punishing a Policy Holder

Insurance companies don't see all claims as grounds for rate increases.

If you file a claim for an injury that someone suffers because they slipped and fell on your property, or because your dog bit your neighbor, or because you neglected to deal with water and mold damage in your home, it is very likely that your insurance company will hold this against you. No insurance company will take kindly to damage that is caused by your failure to take measures to prevent it in the first place.

If you have a high deductible, and you get an estimate that isn't significantly more than your deductible, it makes no sense for you to risk possibly having your insurance company count the claim against you. You would be better off by simply stashing the amount of your deductible in a savings account that pays you interest, and having that money and a little more available to pay to repair the damage.

On the other hand, if you have severe damage such as a collapsed roof that is caused by a freak storm, the cost of the repair is likely to be substantial, but you will know how much your insurance will pay to replace the roof when the adjusters talk to you and examine the damage.

Rules regarding rate hikes and penalties for filing a claim aren't carved into stone. Some insurance companies may have rules requiring that agents report customers to the company for merely discussing the claim process – even without filing. To avoid finding yourself in an awkward situation simply for making an inquiry, make a point of asking an agent about the company's claim policy before you actually sign up.

Knowing what you're up against for filing a claim – regardless of the size or amount, before you ever have to do so may ultimately save you a huge amount of money.

The best way to protect yourself against a potential penalty is by not filing a claim unless it is absolutely necessary, and that would be for severe property damage due to a catastrophe or natural disaster.

Every state has different laws, and the state department of insurance website can be a good resource for finding out specific information as it pertains to your state. If you live in a place where weather disasters are commonplace, be sure you understand the type of coverage that is available to you, how the state regulates it, and what the cost is. And for you to understand this better, you can get multiple quotes using this website & compare rates from different insurance companies.