Learn Me: Home insurance claims - Rate hikes

Hey folks,

 You may have heard a hurricane rolled through Florida this past weekend. I fared well, lost a big ol tree, part of my fence and have a new dent in my garage door. Minor issues in my opinion.

Normally I wouldn't consider filing a claim because the fence was a POS, I wanted to replace the garage door eventually anyway and I can always replant a tree. My coworkers think I'm crazy. They think rates are going to sky rocket anyway because everyone else is filing claims so you may as well put your policy to work.

Is home insurance like car insurance where the more often you file a claim the riskier you are? 

Yes and no.  Yes in general, but often  companies do not count claims from catastrophic events as part of the risk profile for an individual, just for the area.  

If the fence was junk, you'll likely only get ACV vs RCV anyway.

The two hurricanes in the southern states will see MY rates increase, and I live 3000 miles north of there.  I think I'd probably not claim, just because it will take a few years for them to get to you, and you could have paid, fixed, and forgotten all about it by then.

You shoulda seen my shop insurance the year after 9/11.

I'd make the claim.  What's the point of having and paying for the insurance if you don't use it? 

I've made two hail claims on my house, total between them was over $100k.  My rates went up, but so did everyone's in the state.  In other words, my rates would've gone up regardless of me making my claim or not.

I can't recall who right off, there is a HO adjuster on here who may contradict me - if so I defer to him - but IIRC the rule of thumb with homeowner's insurance is "use it and lose it" so its best not to make a claim unless its sizeable. That said, I made a storm claim c. 2009 with no ill effects. By 2012 the insurer was exiting the FL market and I ended up with Citizens for a while. 

Streetwiseguy said:

The two hurricanes in the southern states will see MY rates increase, and I live 3000 miles north of there.  I think I'd probably not claim, just because it will take a few years for them to get to you, and you could have paid, fixed, and forgotten all about it by then.

You shoulda seen my shop insurance the year after 9/11.

Yeah this. My house insurance used to be about $50/month.

Now I pay more for house insurance than I do for car insurance.

NGTD said:

Streetwiseguy said:

The two hurricanes in the southern states will see MY rates increase, and I live 3000 miles north of there.  I think I'd probably not claim, just because it will take a few years for them to get to you, and you could have paid, fixed, and forgotten all about it by then.

You shoulda seen my shop insurance the year after 9/11.

Yeah this. My house insurance used to be about $50/month.

Now I pay more for house insurance than I do for car insurance.

Ugh, the joys of living in the land of constant wind and hail damage.

Insurance on my 1800sq ft home is $2100/yr for the CHEAPEST we could find. My typical insurer, State Farm, wanted $2700/yr for HO insurance.

Hmmmm ok maybe I'll reach out to my broker and see what he thinks. For the record my car insurance is the same price as my home insurance as well. Right around $850 a year.

Deductible is around $2k

Rate increases are figured by underwriting so I know little about whether it the rates will go up or not or if you will get dropped or not.   Getting dropped certainly isn't automatic as I've seen the same house as many as four times. My policy seems to increase a couple hundred a year. No claim history home or otherwise. 

Take a look at your Declaration page.  It will tell you the basics of your coverages as well as your deductibles.  

Standard disclaimer to take any advice as being generalized since I don't know your policy or companies operating procedure.....

Fencing is going to be Coverage B and is usually paid on actual cash value (depreciated). Typically estimated in sections of 8' fencing damaged. 

A garage door is going to run about $1500 for a 16' door but will likely not be depreciated. 

The tree needs to be resting on covered structure (house, fence, shed etc) for any of the removal to be covered.  Usually the cost to remove it and place it on the ground is covered. To move it to the street or off to the dump is capped at $500. They are not going to pay to replace the tree.

For the storm I'm at $2500 of tree removal, have some damage to my fencing and pool enclosure framing. I could file a claim but my deductible is about $6500 so there isn't much point.  My policy runs about $2400 a year. 

I can tell you that we've seen a large influx of claims. Roughly a 400% jump from a normal month in 3 days so don't expect someone at your door tomorrow for a non emergency.

Huge warning.  We had an issue years ago when we went to swap from AAA to another company for our home insurance.  We had never filed a claim with AAA, but over the previous few years we'd called on three occasions to inquire about making a claim.  In each case, once we'd talked to them, looked at the deductible and assessed the damage we did not file a claim.  

When we went to talk to other companies about swapping,  they originally came back with lower rates.  When we went to switch they suddenly came back with a rate hike.  We contacted them to ask WTF and were told that the rate we had been quoted was based off no prior claims, but when they checked AAA had three claims on our record.   We got it sorted out and proved we never claimed, but it was a hassle.  I don't know if this is/was just a AAA issue or our location (Michigan) or just something that used to happen (10+years ago).  But now I don't ever call to discuss making a claim unless we are 100% sure we will go through with it.

^If you speak to a claim rep, or ask a coverage question, it goes down as a claim.

If your agent isn't knowledgeable enough with the policy to know when and when not to get the claim reps involved..............find another agent. 

Thanks folks. Sounds like a major pain in the butt and not worth the risk. I'll wait until the next storm that causes major damage. I already cleared the tree with a 16" electric chainsaw I rented for free from the library.

....Your library rents chainsaws?   

That is AWESOME.

Yep! They have a full tool library.