Filing A Claim On Your Homeowner’s Insurance Will Not Increase Your Premium
October 18, 2007 by Erik Folgate
Filed under Insurance
When I am doing inspections for property damage to residential property, I get this question about 75% of the time:
Will filing this claim cause my premium to go up?
I like to be as candid and honest with customers as possible. Some adjusters would just say, “That’s not my area of expertise”. I likeur to give people an answer that will actually answer their question. The answer is that filing a claim will NOT cause your homeowner’s premium to increase. Contrary to what many believe, they associate having a claim filed one year with their rates going up. The fact is that claims don’t dictate the premium with regards to homeowner’s insurance. Homeowner’s insurance does not act like auto insurance. Auto insurance has dozens, sometimes hundreds of tiers for premium rates. Your claim history, citation record, points on your license, and various other things contribute to the tier that you are placed in and the premium you pay.
Homeowner’s insurance focuses more on the region that you live in. The number of catastrophes your area has suffered in the past few years, the potential risk in your area, the type of residential home, and the amount of coverage you buy, and other factors dictate the bulk of your premium. Filing one claim will not spike your premium. Now your premium may go up in the subsequent year, but do not put two and two together. Insurance companies are more concerned with the amount of claims you have filed in a given period. If you make three claims in one year, they will most likely drop you policy altogether, not raise your individual premium.
So, if you have a loss with significant damage, the right thing to do is file the claim. After all, you’re paying a premium every year, why not use your insurance for what it’s designed to do?
Hello: I have a walk-in shower that leaks and it has caused part of my livingroom ceiling to fall out which also resulted in having to remove my carpet; I also need apointing done on my property and I need a back door
I want to know if this is covered by my homeowner insurance and is it better to use an adjuster or find a contractor myself.
If these things are covered by homeowners insurance, can’t I file without an adjuster?
Hello Mary, great questions.
Let me try to answer them one at a time.
1. First of all, I cannot tell you if you have coverage in your homeowner’s policy for a certain scenario without reading your policy. Every company has polcies which differ in policy language including exclusions, conditions, and coverages. But generally speaking, if you had a walk-in shower that was leaking behind the walls (meaning you were unaware it was leaking until it causing your ceiling to cave through) then there should be coverage for the resulting water damages, which would be replacement of the ceiling. However, the policy would not pay to fix the leaking shower.
2. Okay, here’s how filing a homeowner’s claim works: An adjuster will be assigned to your claim. You cannot request that an adjuster NOT be assigned to your claim. They are the only people that handle insurance claims, because they are licensed by your state to adjust insurance claims. An adjuster will schedule an appt with you and they will inspect your damages. Once they determine coverage, they will prepare an estimate for what they think the damages will cost. Then, they issue you a check and you use whatever contractor you want to get the work done. Some companies may offer some names of contractors to do the work and some companies will even guarantee that contractor’s work if you use them. However, they can never force you to use a certain contractor. Insurance companies are in the business of paying claims, not rebuilding houses.
I hope that answers your questions. If you have more questions, email me from the moneycrashers contact form. I’d love to help you out further.