If you’re like most people, you pay your auto or homeowners’ insurance on time every month, and maybe you make an occasional claim when the need arises. While this is part of the purpose of paying for insurance, what you might not realize is that those claims are tracked and can accumulate over time, with the primary effect being that your insurance rates are raised. This in turn affects your policy availability, and may even result in your insurer denying you the ability to renew it. Fortunately, there are some things you can do to educate and protect yourself against rising rates or renewal refusal.
If you’re considering making a claim, evaluate whether or not it’s really necessary for you. Adjusters frequently evaluate your claims history, and if you make more than two claims during a three-year period, this can signal to your insurance company that you are a high-risk client and you may face the threat of having your policy canceled or your premiums raised at the very least.
One good tip to keep in mind is that you should only make a claim if your repair cost is at least three times the amount of your deductible. If you have a $1000 deductible and the repairs are going to cost $1200, it isn’t worth making a claim. On the other hand, if your repair costs total $3500, it’s safe to make a claim. If you have a local agent, you can always check with the agency first for advice.
When you do make a homeowners’ or auto claim, it is reported to a national database that is very similar to a credit bureau, where it stays on record for five years. If you’re considering making a claim, think about what others you’ve made in the past five years to evaluate whether or not you’re willing to run the risk of higher insurance payments.
If you’re concerned about rising insurance rates, take a look at your claims history. Are there any revealing details that might explain a rate hike? With your agent’s help, you can examine your past claims and work towards managing your insurance in the best way possible.
Have your rates risen after an insurance claim? Do you have any tips on keeping the cost down?