I thankfully survived Isabel, but many of my trees did not. I’ve chained sawed a few, but two are hung up on other trees and it’s a bit unsafe for me to hack away. My insurance company will give me $500 toward getting them taken down, but they told me this would immediately raise my rates and they would recover the $500 with in two years! Thye do this, so they say, to prevent other home owners from using insurance for routine maintenance, and to “help us all keep our rates down.” In eight years I’ve never filed a claim.
Two questions. First, is this Bull S— as it seems, and two, is there a rule of thumb for when to file home and auto insurance claims and when not to?? Thanks in advance for any info.
Whether or not you’ll get a surcharge on your policy depends on a few things.
First: The insurance company. For weather-related claims especially CAT(astrophe) claims such as arise from Isabel you typically will not see a surcharge. But some companies will hit you no matter what.
Second: Your claim history. For both Auto & Home insurance, many companies will not zap you if you’ve been with them for a number of years and have filed no claims.
Third: The magnitude of the claim. They key term here is “surcharge threshhold.” Meaning, once the insurance company pays out a certain amount, the surcjarge will be activated. The surcharge is NOT usually graduated depending on the size of the claim–you either get one or you don’t.
The homeowner’s insurance biz is in a helluva spot right now. For a lot of reasons the premiums taken in by the isnurance companies are not sufficient to cover the claims made by policyholders. One way to recude costs without restricting coverage is to charge extra premium for those customers who make a bunch of small claims.
My question is: who told you your rates would go up? Was it your agent who may be overly concerned about his loss ratio? If this is the case, and I expect it is since claim representatives are not supposed to discourage your filing a claim, call the claims department directly if possible and simply ask them if this TYPE of claim would be considered SURCHARGEABLE. They won’t be able to tell you details, but they can tell you that much. Take that information for what it’s worth and re-evaluate your relationship with your insurance agent.
As for a rule of thumb, there really isn’t one aside from the obvious: how much more will you pay in premium vs how much will the claim cost you. Stuff you want to discuss with your agent includes: what types of claims will affect your rates (theft/vandalism usually doesn’t, but collisions do)? And what is the likelihood of your being “dropped” as the result of filing one claim? Two? Three? Over how long a period?
Best of luck to you, glad it was only some trees!
There is a local consumer affairs guy who does a daily radio show and occasional television appearances in Atlanta. His radio program is widely syndicated in the United States. He has reported many insances of people not just having their insurance rates go way up after a single claim, but often have their insurance cancelled after just one claim.
In fact, he has reported some cases where even inquiring about filing a claim (“Hey, insurance agent, a bunch of my trees got knocked over by Hurricane Isabel. How much would you even cover if I filed a claim? … That’s all? Thanks, but I’ll just eat the cost.”) getting cancelled.
The consumer affairs guy has a nice web site. www.clarkhoward.com