Insurance Premium: Why is it High?
Insurance premiums are what you pay monthly to an insurance company. This monthly payment varies due to a variety of reasons like personal factors. Did you know the kind of dog you have can make rates rise? Here are a few of the major reasons that your insurance premium might rise.
Claim Limit
Your insurance premium may be high because you have filed too many claims in a short period of time. Insurance companies have the ability to pull your claim history through Claim Loss Underwriting Exchange (C.L.U.E.). C.L.U.E. stores all loses in the database for five years, but various states have the right to raise the amount of years. Your name gets red flagged when you file more than two claims in a three year period.
A rule of thumb is: D
Do not file if the payout is not worth it. You should file an insurance claim only when your situation is a severe emergency.
Types of Claims
Not only can too many claims boost your monthly premium, but so can certain types of claims. Let’s review some claims that can hurt you rather than help.
Dog Bites
Dog bites continue to represent one-third of the payout dollars for homeowner liability claims, according to the latest data from the Insurance Information Institute and State Farm Insurance. Home insurance covers dog bites under homeowner’s liability insurance which covers you if your dog bites someone while you are walking it or if the dog bites someone in your home.
When filing out home insurance paperwork, insurance companies will ask what type of dogs you have at your house. Insurance companies have a list of dog breeds that they feel are more likely to bite. If your dog’s breed is on this list, insurance companies can use this information against you. Some insurance companies can chose to not cover your home based on the breed of your dog.
A dog bite claim might be the reason why your home insurance rates have risen. This can happen even if your dog is not on the “aggressive dog breed” list. Some insurances put the dogs on a probationary period where they must stay ‘accident free’ to lower your premium.
Water Damages
Insurers hate water damage claims because they can be complicated, costly and sometimes persistent. Water damage is a very broad issue, but the main concern insurers have is mold. Say you find mold in your house and you file a claim against your policy – no big deal, right? Well, since insurers can refuse to cover your mold problem. If they decide to cover the issue, insurers will record your claim in C.L.U.E. which will follow you for a least five years. Insurance companies can even blackball you if that see a mold incident on your house. A claim that involves water also make selling your house difficult in the future.
Slip and Fall Claims
Insurers do not like to take file a claim against themselves which will call for proof for liability. If the homeowner is at fault, their insurance company will have to cover the expense. Slip and fall accidents mostly end up at the emergency room which can be very costly. If a slip and fall accident occurs at your house, your insurance premium may rise.
Claim Free Discount
A way to lower your insurance premium is by taking an advantage of a claim free discount they may offer. Some insurance companies reward you if your record is claim free. Luckily, filing a claim that is caused by bad weather or a catastrophe should not raise your insurance premium or count against you.
Insurance Premiums
As this overview shows, insurance companies have a way of regulating insurance premiums. Determining your insurance premium is a complicated process involving many strict deadlines.
If you find yourself facing unfairly high rates for your insurance premium, Byrd Law insurance litigation attorneys have the experience to assist you.
