Insurance is good and I'd like to keep it.

August 18, 2009 7:18 AM

Is filing too many claims always a death knell for your insurance?

Our neigborhood has been going through a crime wave that is rather unprecented and ongoing. We've been broken into twice in the last three years and filed claims both times. The claim for both adds up to around $6,000. Great.

Then some schuck injured himself on a used tool he bought from us on Craiglist. Insurance company provided a lawyer who says "they have no case, surprised they had the balls to try and file this."

Yet, of course, we all still have to go through the requisite motions. We have been with this insurance company for home and auto for 10 years or so, but everything online I've read indicates that they are about to drop us like a hot potato. Do individual agents have the ability to protect us from whatever algorithm wants to dump us? Can we raise our deductibles, add some coverage something to get us some leverage?

Anyone have any experience with this? What did you do? What insurance company did you find to take your high risk butt?

posted by anonymous to home & garden (6 comments total)

We have Nationwide insurance and they use some kind of points system that was described in my latest renewal paperwork. Your policy gets assigned points when you make certain kinds of claims. I assume, then, that if you reach some maximum allowed number of points, your policy will be cancelled (Although I haven't read enough to know how it works exactly). Have you asked your agent to see if your insurance company uses a system like this?

I was also told by an adjuster recently that if no money is actually paid out, no points would be assigned. So maybe if this case doesn't go anywhere, you would have nothing to worry about? Still, I think your agent is the best person to ask.
posted by cabingirl at 8:31 AM on August 18

We made three inquiries on our home insurance over three years from water damage due to ice damming and a poorly done roof. We only filed two claims, but the one inquiry that didn't result in a claim also resulted in points being added to our insurance score. Both claims combined totaled less than $2,000. We then received notice that our home owners insurance would not be renewed due to excessive claim activity.

Our agent told us that the dollar total wasn't the issue, it was the ammount of claims and possible claim activity. He said that statistically people that file two claims are likely to file many more and insurance companies are being more cautious with those kinds of clients. He stressed that home insurance is for major issues like fires and significant structural damage and not for "minor inconveniences" totaling less than a few thousand dollars.

In our instance we had already paid to have the roof fixed before we received the termination notice, which showed the insurance company that we were pro-active (and did it with our money and not theirs), so they renewed our policy at the same rate we had been paying. But now I'm nervous about filing a claim or even inquiring about an insurance issue again. Before they renewed our policy I was already looking at policies with "high risk" insurers, which would have cost 3 or 4 times what we were paying with very high deductibles. We now think of our home insurance more as "catastrophe insurance", which we hope to never actually use.
posted by Slack-a-gogo at 9:05 AM on August 18

we filed three claims over a two year period -- a small one and two larger ones. The cost of our insurance went from $800 to over $2000, and we can't get quoted by new companies. So, file wisely.
posted by dpx.mfx at 9:50 AM on August 18

Get the highest deductible available, and only file claims that significantly exceed it. Paying $3k out of pocket for an issue is a lot cheaper than having your home insurance go up an extra $3k per year. Wait for the tree to fall on the garage and file the $25k claim, otherwise act like you don't have insurance at all.

I've heard one too many stories of people being cancelled for a couple small claims, being cancelled, then paying so much more for insurance they, in retrospect, would not have filed the claims. Cut it off at the beginning, you can't fix it once you are canceled.
posted by Antidisestablishmentarianist at 12:42 PM on August 18

"people being canceled for a couple small claims" should have been "people filing a couple small claims"
posted by Antidisestablishmentarianist at 12:44 PM on August 18

In a word: Yes.

In a few more words: Usually. Homeowner's insurance is definitely one of those policies you buy because it's insane to not have in the event of something huge, but you never, ever want to use it if you don't have to. Even something as minor as calling your insurance carrier about a claim "can and will be held against you." If you've been with your carrier for 10 years with no claims prior to this they may be willing to renew you but it will almost certainly be at a higher rate and no other company will rate you until five years has passed since your last claim. Note that if your insurance is dropped, you can always go to your state's insurer of last resort to get basic, high-deductible, named-peril (usually fire and major damage) insurance. It will be high for the little amount of coverage you get. In addition, in most states your policy can't be canceled just for making a claim, only non-renewed at the end of the policy.

Before you go shopping elsewhere for insurance, whether home or auto, pull a copy of your C.L.U.E. report. (The acronym stands for Comprehensive Loss Underwriting Exchange) Just like credit reports, you are entitled to one free report per year. Make sure it's accurate and then go shopping. Most claims drop from your CLUE report after 7 years.
posted by fireoyster at 1:29 PM on August 18 [1 favorite]