State Farm has been very good to us regarding car insurance. So, we feel they’ll treat us equally fairly for filing a claim against our home owner’s. But everyone is warning me not to do it. While State Farm verbally has assured me our rates won’t go up, people tell me horror stories and claim they’re all the same. Is this true?
My claim would be small. After a $500 deductible, the claim would be, worst case, $2000, let’s say. Probably less.
Will this ruin me? What’s your personal experience? Any insurance adjusters wish to comment, as well? My wife and I are arguing over this. (Please, you’ll be saving our marriage!) I say it sounds bad; she says we can trust State Farm to be true to their word. (And, is it gouche to ask for that in writing?)
If you’re afraid of offending the entity being paid to provide a service, why pay them in the first place?
Example A: Premium + unsubmitted claim = x.
Example B: Premium with increase over time = y.
IANAL, but don’t believe it is legal for your insurance carrier to increase premiums in response to a claim for which you weren’t directly responsible. Don’t confuse this with premium increases owing to full replacement value policies which are tied to cost of living adjustments.
Anechdotal evidence only. I’ve been with State Farm for auto since 1973. Had homeowners since 1981. Had a 2000+ claim on water damage to house and no repercussions. That would have been about 1989. Actually, the 80 year-old soil stack and connecting pipes just got old, but my agent, bless him, made it happen. We didn’t get the stack replaced(paid for that, but got new kitchen ceiling and upstairs bathroom replumbed. We paid for some of it.
I’m curious how long you’ve been with the company. Longer with no claims would probably help.
I’ve had the same insurer since I was a sixteen, Allstate in my case, and I made a ginormous claim due to a house fire and didn’t get my premiums raised. Curiously, they’ve never raised them whenever I got traffic tickets either. My rates dropped when I crossed over to the lower-risk adult age (21? 25?) and they’ve never went up.
I’ve heard tons of folks swear one should avoid making a claim if at all feasible, as if there’s a direct correlation between claims and rates that’s written in stone, but I’ve yet to see any evidence of it.
I think they’re allowed to up your premiums after a certain amount of claims in a given time (sorry no cite).
My father’s a public adjuster and when he talks about state farm, fire comes out of his mouth. But that’s from a negotiating standpoint, which I’m sure has to do with individual personalities more than anything else.
But the whole point of insurance is to recover losses. You pay just for that reason.
We have State Farm. We had about a $2400 homeowner’s claim after we’d been insured by them for two years. No repercussions.
However, last year when the entire area had tornado/storm damage, I called & told them we were going to have our roof evaluated. They cautioned me that putting in another claim might cause problems. Luckily, we didn’t need to, but it definitely made me a little uneasy.
I also believe that a second claim would be the trigger for some type of action. There was a local story here of a couple that made 2 claims in a year or two and then were not allowed to renew their policy. They had been customers of AAA for over 25 years too.
I used to sell insurance and our company didn’t raise rates based on claims.
The only repurcussions you might get is if you made 3 claims in 3 years, the company had a right to terminate your policy. This was built into the policy as a protection against insurance fraud.
I’ve never dealt with State Farm, but many companies in Canada reserve this right. It is to protect against fraudulent claims. After a certain number in a short period of time (3 in 3 years was mentioned), they have the option to non-renew your policy.
Your premiums will likely increase a small amount each year, but that is for inflation protection on your house. Most companies I dealt with would raise the insured value on the house 3-5% each year, with the premium reflected.
We are with Statefarm since 2001. in 2002, we had water damage due to frost. $2,600 claim, $500 deductible - no increase in rate.
However, if you ever change insurance, they will probably ask you whether you ever had a claim over $2,000. Don’t know what the implications of that would be, but presumably, you rates might go up then.
Sorry for the typos - hit the wrong button and submitted to early. Here it is again:
We are with State Farm since 2001. In 2002, we had water damage due to frost. $2,600 claim, $500 deductible - no increase in rate.
However, if you ever change insurance, the new company will probably ask you whether you ever had a claim over $2,000. I don’t know what the implications are in reality, but potentially your rates might go up then.
I made 2 claims against my homeowner’s policy with State Farm. One was for damage from an ice storm, and the second was for damage caused by a drunk driver parking his truck in the living room. Neither raised my rates, and the claims were about 2 years apart.
SF got to subrogate part of the costs of the drunk driver case, but I don’t know how much they got back.
We just had a review with our insurance agent (American Family) 2 cars, 1 house.
We get a discount on the house insurance, because we have made no claims. (It has to be on the house, I’ve made claims on cars.) I don’t know if our base rate would increase because of a claim for the house, but I’m sure the discount would go away.
Argh! I just typed out a long reply and milliseconds before I hit “Submit Reply” my baby hit the Escape key…poof!
Anyway, to make a long story short, we filed a claim with our Homeowner’s Insurance carrier (Allstate) in order to protect us from a neighbor who was threatening to sue us for “damage” a pinecone from our property did to her car. (This whole incident was detailed in an old thread and escalated to the point of silliness.) The insurance company advised us to do this so that they could protect us in court if it came to that. We filed the claim knowing it would be rejected, and it was.
Later that year, we sold our house and moved into an apartment. When we tried to get renter’s insurance, we were denied by Allstate and several other insurance companies because of the rejected claim on our record.
Your rates may not go up, but you may want your insurance company to clarify what could happen if you tried to get additional or different insurance from them or another company.
Exactly what happened to make you need to turn in a claim. Wind, hail, fire, broken water pipe, mold, etc.?
How many claims have you submitted in the last 3-4 years and how much was paid out for those claims?
It’s all about risk. If you turn in lots of claims in a short period of time, you’re a bad risk. If you have a couple of tickets, you’re a bad risk. If your previous insurance carrier paid out a lot of money for claims, you’re a bad risk. (Also, if you ever switch insurance companies, don’t lie to them about how many claims you’ve had or how much was paid out because they can check everyone’s previous insurance records and it all shows up there!) Those are the two big factors for insurance companies canceling or non-renewing your policy due to claims. Every insured has a loss ratio which is the amount of money you’ve paid them in premiums vs. the amount of money they’ve paid you in claims. If you have an 80% loss ratio… this claim could put you over the top.
Talk to your agent and see what he thinks. He probably won’t put anything in writing though. If he sounds a little iffy about it, call State Farm’s home office and talk to someone there… speak to their Underwriting Manager or one of their underwriters and get their opinion.
Every insurance company is different but when rates go up it’s usually due to rate increases or due to multiple claims/losses on your part or due to receiving too many tickets.
