Why You Should Not File an Insurance Claim After Every Water Loss

8/28/2022 (Permalink)

You may be tempted to file an insurance claim following any water damage to your Deerwood, FL, home. However, if you make too many claims over a short period of time, your insurance company may refuse to renew your policy. Excessive claims could also raise your insurance rates.

When Insurance Rates Increase

There are several factors that determine the rates you pay on your insurance policy. Obviously, if the damage to your property was the result of your negligence, the insurer will charge you more money in the future. Other circumstances that could cause your rates to rise include:

• A high number of previous claims
  
• A low credit rating
  
• Frequent natural disasters near your home
  
  

The rate hike could be as much as 40 percent. This increase could stay in effect for several years.

When To File a Claim
Before you make an insurance claim, you should check your policy to see if filing such a claim will increase your rates. Ideally, you should understand the consequences of making a claim well before your next water emergency.
Since a large number of claims can hike your rates, you should avoid filing claims unless absolutely necessary. If your home only sustains minor flood damage, you can afford cleanup and restoration services without involving your insurance provider.
Filing claims for large disasters only can save you money, as well. Decide how much you can afford to spend on any one loss. You can then put that amount into a savings account and increase your deductible to that same number. The savings account can collect additional interest, and your higher deductible should reduce your rates.
Making an insurance claim can cause your bill to increase. You should thus only file a claim following a large home flood or similar disaster. Minor repairs should not cost you that much money, so save your insurance for the major restorations.