Homeowner’s insurance is an important policy for homeowners to have. It protects the home and property in case of fire, theft, natural disasters and other situations that may cause damage or put occupants in danger. But homeowners must be careful about filing too many claims in a short period of time as this can cause providers to cancel the policy. If too many claims are filed, the insurance company may decide the homeowner is too high of a risk and they may raise rates or drop the policy altogether. That’s why homeowners need to think long and hard about the claims they are making and decide if it’s worth the risk before filing. This article will review what happens if homeowner’s insurance cancelled because of too many claims and what you can do if your insurance is terminated.
Why Do Insurance Companies Cancel?
According to a study conducted by the Independent Insurance Agents & Brokers of America about ten years ago, it’s not unusual for homeowners to lose their insurance. Findings revealed that 2.5 million households lost their insurance in two years while another 51 million saw their rates increase. This is because homeowner’s insurance isn’t a big moneymaker for providers. Therefore, when policies become too demanding, insurance companies are quick to drop them. Providers also now have access to databases such as CLUE, the Comprehensive Loss Underwriting Exchange. With this new technology, they can easily access history on homeowner’s claims to decide whether or not they are high risk. If customers are high risk, they may refuse to take their policy or quickly drop them if they see many claims being filed.
How to Keep Your Claim
Homeowner’s insurance canceled due to claims is a frequent occurrence. So what can you do to make sure this doesn’t happen to you? Here are some tips.
• Try not to file small claims. Decide if the request is worth it before filing.
• Don’t file claims that exceed your deductible by less than $200. If this is the case, pay out of pocket.
• Keep with the same insurance company. If you show your provider you’re a loyal customer, they will be less likely to cancel your policy.
• Bundle all your insurance with one company. This will also let providers know you are a loyal customer and make them less likely to cancel.
• Keep your home in good shape. If your home is in good condition, you will be less likely to need to file a claim.
• Try not to file small claims. Decide if the request is worth it before filing.
• Don’t file claims that exceed your deductible by less than $200. If this is the case, pay out of pocket.
• Keep with the same insurance company. If you show your provider you’re a loyal customer, they will be less likely to cancel your policy.
• Bundle all your insurance with one company. This will also let providers know you are a loyal customer and make them less likely to cancel.
• Keep your home in good shape. If your home is in good condition, you will be less likely to need to file a claim.
What if My Claim’s Cancelled?
If the worst occurs, you may wonder, what happens if homeowner’s insurance is canceled? If homeowner’s insurance is canceled because of too many claims, the first thing you will want to do is try and get reinstated. Start by going to the insurance company to find out why the claim was canceled in the first place. If they tell you it was because you made many claims in a short period, tell them you were unaware that this was a problem. You will try to refrain from this behavior in the future. They may also tell you that they believe a large claim you made may lead to more claims moving forward. In this instance, you may have to take preventative measures to protect your home better and put down a larger deductible.