Understanding Insurance Claims and Rates

10/14/2019 (Permalink)

Comprehensive insurance plans are a wonderful investment because you can rest easy knowing you and your home are protected in the event of an accident, natural disaster, or other incident that would otherwise cause major financial problems. But there can be a downside to filing an insurance claim, in that you run the risk of having your rates raised in the future. Understanding how claims work and how you can protect yourself from skyrocketing rates help ensure you will be fairly compensated without paying a hefty price down the road.

Common Insurance Rate Factors

Insurance rates tend to stay fixed so long as there is not a major change to the home, your personal circumstances, your surrounding area. Rates can change, however, for a variety of reasons, including:

• Number of claims – If you have filed multiple claims, especially within a short period of time, your rates are likely to be raised since you will be considered a high risk client
• Who is at fault – Filing an insurance claim following a natural disaster is less likely to result in a rate hike since you are not at fault
• Type of incident – A home flood is often damaging to your reputation with your insurance company and is more likely to result in a rate hike than something small such as a first speeding ticket
  

Additional Points to Consider

Since you run the risk of rate hikes, it is important to be discriminating when deciding whether to file an insurance claim. During a home flood in Norman, OK, for example, ask yourself if paying to repair and remediate water damage is affordable without involving the insurance company. It usually does not make sense to file a claim for a small incident, especially if the cost will be similar to your deductible. Remember that insurance exists to help you when you truly need the financial support, not to pay for any small repair or cleanup, so understand your policy and the impact it will have before deciding whether to file a claim.