As public adjusters, our clients often ask us whether making a claim will cause premiums to change.
The public adjusters at VIP Adjusting have been representing clients in Port St Lucie and Martin County for years, and even though we’re not insurance agents, our clients are often curious how making a claim will affect their premiums or whether or not they’ll be “dropped” or non-renewed. Okay, “curious” isn’t the right word. Concerned is perhaps a better description.
Our public adjusters never want to encourage a homeowner to make a claim for damage that isn’t covered, under deductible, or otherwise frivolous, but when the concern arises in connection with a legitimate insurance claim for property damage related to increasing homeowners insurance premiums, or the possibility of being dropped by your homeowners insurer, here’s what we usually tell our clients.
Homeowners insurance premiums normally go up in Florida every year anyway
Making a homeowner’s insurance claim for property damage isn’t like automobile insurance where one claim is going to make your premiums skyrocket. Instead, your homeowners insurance premiums are more likely to be reflected by your location (either proximity to the coast for hurricanes, or certain zip codes), the age of your home, and your overall claims history.
One claim isn’t likely to make your premium go up, but if you have multiple claims in a certain period of time, it’s possible.
Homeowners insurance underwriting in Florida is pretty mysterious, so we’re just telling you what we have experienced. It’s unlikely your agent can even get underwriting information. Short of working in the underwriting department, you’ll probably never know for sure.
To an insurance company, it’s all about risk. If your house is at a higher risk of having damage, they’ll either raise your premium, or try to slip in a coverage limit and offer a more competitive premium. If you have old cast iron pipes, you’re at a higher risk of damage from a plumbing leak (with an expensive repair), you might see a higher premium, or a lower premium, but with a cap on coverage related to plumbing. This is important to discuss in advance of a claim with your insurance agent.
If you have three plumbing leaks in the span of a year or two, they might re-evaluate the risk and up your premium. This is an indicator of an increased risk. Being the victim of a hurricane, however, doesn’t change the risk for the property at all.
But hey, this is Florida, and we’re talking about insurance. Insurance companies raise premiums every year anyway. Our public adjusters typically recommend speaking with your agent about a month before renewal to get quotes in case there are new companies willing to insure the home, or rates have changed. It can’t hurt.
If I make a claim for damage to my home, won’t the insurance company drop me?
It’s not common that an insurance company drops someone for making one claim, but it can happen. It might have been in the works anyway before you made a claim. Insurance companies throughout Florida are always changing and sometimes they change areas they cover, or agents they allow to write policies on their behalf. It’s possible that your claim changed your agent’s claim ratios and the insurance company has decided to drop your agent.
Anything is possible, but if you have a legitimate claim, you shouldn’t stress about this possibility too much because Florida has a government run property insurance company that is a failsafe for anyone who can’t get insurance, or who can’t get competitive insurance rates.
You must make repairs following a loss or damage to the home, though
After you’ve made a claim, you do have to make repairs or else you can be dropped, even by Florida’s insurer of last resort. The reason for this is because homeowners insurance provides more than just property insurance coverage. Homeowners insurance also provides liability coverage in case anyone is hurt on your property. If there’s damage to the property that is unrepaired, the likelihood of it causing injury is increased, and because of this, you can be dropped even during the policy period before the expiration.
This sometimes happens when a mortgage company is holding the insurance proceeds hostage and a homeowner can’t get the repairs completed, leaving the homeowner in a terrible position.
VIP Adjusting’s public adjusters have been through these scenarios many times with our clients in Stuart, Hobe Sound, and Sebastian. Although it’s not the main focus of a public adjuster assisting you with an insurance claim, we will always be there for our clients to offer our advice and share our experience.
You might also be interested in:
Why you should hire a public adjuster
More about VIP Adjusting’s background
Central Florida has seen a recent spike in strong storms resulting in tornado damage