When Should I Not Make a Claim?

This is a question that many homeowners have to ask themselves when something happens to their home or their belongings. Homeowners or house insurance is a kind of protection that is commonly purchased by owners and is intended to pay for a number of problems or issues that you may face during the time that you own your property. So while it may seem logical to use your policy for any covered issues, there are drawbacks to submitting claims on a house insurance plan. In this article, we will go over some times when you should make a claim on your plan, and some times when it might be better to avoid using your protection.

Claims Lead to Increased Rates

The main disadvantage to using a homeowners insurance policy is the fact that the insurer will be likely to raise the rates of your plan. Providers are doing their best to make profits on the policies that they sell, and if a policyholder uses their coverage, they represent a risk of reduced profit. Therefore, these individuals will often have to pay much more for their house coverage due to raised rates after claims. However, insurers will not always raise the rates of the individuals that submit claim, and there may be certain circumstances when a claim will not lead to more expensive premiums.

In some cases, damages and losses happen to homeowners that lie completely outside of the control of the owner. For example, if you live in Montana and a freak tornado destroys your roof, the insurer may not raise your rates after you submit a claim. On the other hand, if you submit claims for damages or losses that are a direct result of your actions, you will almost undoubtedly see an increase in your premiums, and a large one at that. Therefore, the key is leaning what kinds of claims your insurer will see as a threat or red flag, and which claims they will let slide.

Speaking With Your Agent

In order to get this information, you may have to speak with your agent. An agent can inform a customer whether or not the company is likely to raise rates due to a specific type of claim. However, it is important to have this discussion before you actually experience a loss, as the agent may be required to tell the insurer about any problems, and they can potentially raise your prices when they find out about damages or losses. Speak with your agent today to get the information that you will need to make this decision.

When deciding whether or not to submit a claim, the main question comes down to if you can afford paying for losses from your own pocket. Smaller damages and problems are typically affordable enough to cover on your own, and using your personal money will likely save you a lot more in the future. If you decide to only use your homeowners insurance for catastrophes and large-scale damages, you can also save a lot of money on your annual premiums by choosing a higher deductible.

There is obviously a lot to consider when deciding on not making a claim on your homeowners insurance plan. Get all of the information that you need from your agent today, and then start thinking about the circumstances when you would potentially want to use your protection. If you find that the policies and practices of your insurer are unfair or inflexible, it may be time to consider switching your coverage to another provider.

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