Las Vegas Insurance Blog
Jan 13

Written by: Jim Valkenburg
1/13/2010 12:49 PM 

Claims that can increase your insurance rates (or result in cancellation)

1)  Dog bites - the majority of insurance companies ask what breed of dog you own when you purchase a new policy.  You may have a dog of "acceptable" breed or may not have a dog at that time.  However, you may get a dog on the "unacceptable" list in the future.  If you then have a dog bite claim, your home insurance will probably be non-renewed and getting another homeowner's policy for the next 3 years will be close to impossible.  The liability in your homeowner's policy will pay for dog bites and the claims are one of the highest average claims in the nation.  Typical dogs on the unacceptable list are Rottweilers, Pit Bulls, Akitas, Chows and Wolf Breeds. 
 
2)  Water claims - they tend to set off red flags for insurers because one water claim often leads to another when there are pipe leaks.  And mold is still an issue even though not as much as in past years (plus mold is now limited in homeowner's policies).  If you are buying a home, it would be wise to find out if there were prior water claims because you may not be able to get insurance if the home you are purchasing has a history of water claims.  One of the important things to think about when you have water damage is "can I afford to pay for this myself".  If you have a $500 deductible and the minor damage comes to, say, $800, do you really want the insurance company to know you've had a water claim to only get $300.  On the other hand, if you come home to a house full of water, you call in the claim.
 
3)  Slip and fall claims - usually because of some hazardous or dangerous condition on your property.  Probably one won't do a lot to your insurance but a 2nd medical or liability claim will certainly either raise your rates or result in non-renewal.
 
4)  Auto rate increases will generate if you've added tickets or accidents to your record.  Some companies do not keep you as a customer if you receive multiple violations or major violations such as DUI, Reckless Driving, or severe accidents including bodily injury.  The good news is that there is always an excellent company for your auto insurance regardless of your record - but the rate changes with your activity.
 
You may think that paying out of pocket for damage covered by insurance is distasteful; however, most insurance companies look "harder" at frequency of claims than severity of claims.  I had a call from a lady that was being non-renewed by her company because of 4 claims in the past 2 years - and she was not paid more than $500 for any claim.  Yet, I am sure that if lightning had struck her house and it had burned down that she would have been renewed without question.
 
I recently read a quote worth remembering:
 
"It gets back to the notion of what insurance is all about:  bailing you out from a large disaster, rather than the small things that annoy rather than harm."

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4 comment(s) so far...

Re: Insurance Claims That Can Raise Your Rates

Does it matter to insurers if in multiple auto accidents you were not the one at fault? Would that still be a basis to not renew or increase your rates?

By Deneen R. on   2/11/2010 2:38 PM

Re: Insurance Claims That Can Raise Your Rates

The good news is that in Nevada it is against the law for insurance companies to increase your premium if you were NOT AT FAULT!! The bad news is that if you want to change insurance companies, you probably can't because companies can look at everything (at-faults, comp claims, not-at-faults) to rate you if you want their new policy. Several not-at-faults can cost you more money only if you are changing carriers.

As a side note - some people strongly believe they were not-at-fault but in reality you may have a small percentage of fault and your company will pay the other party - if that is ever the case, you are still considered at-fault and they can raise your rates because of that.

By Jim Valkenburg on   2/11/2010 2:38 PM

Re: Insurance Claims That Can Raise Your Rates

DUI is probably the biggie for auto insurance. Those who drive while drunk are just begging for a major accident, an arrest, or death. And as far as insurers are concerned, a DUI is the major red flag and a fantastic excuse to raise rates or cancel the insured altogether.

By Robert on   3/3/2010 4:10 PM

Re: Insurance Claims That Can Raise Your Rates

Robert makes a good point for not driving drunk... but insurance companies are not making social statements; they simply adjust premiums based on statistical data. It is a statistical fact that accidents caused by drunk drivers cost more to adjudicate in court and cost much more in pay-outs to injured parties. These costs are what make "rates" go up. It is a rather simple equation... more pay-outs = higher rates. And, yes, Robert there are companies that will cancel an insured if he/she proves to be a high risk for future claims. However, not all companies are the same. We have companies that may surprise you. Underwriting rules vary and they change as the risk factors become known (i.e., as statistical data becomes available). Finally, contrary to popular belief, there are no "red flags" on your insurance policy. In other words you are not singled out and put into a different category because of a DUI or any other violation. The common use of something called an SR-22 to identify high risk individuals is NOT an insurance company device. It is goverened by state laws... usually the DMV. The state you're driving in may put "red flags" on you, but insurance companies simply base rates on statistics. It's not personal.

By Jim Valkenburg on   3/3/2010 4:25 PM

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