Most of us know that insurance premiums often climb after filing insurance claims. Claim the insurance company in the claims, the higher a risk you become. Homeowners insurance many covers water damage, but which water damage claims will cost you in increased future insurance premiums and which will not? How do you know which water claim to file and which one to pay out of pocket?
First, let & # 39; s look at one of the reasons why water damage claims raise red flags with insurance companies: the potential for future mold claims. It is conceivable that after the water has been cleaned up and the final bills paid, a mold It will also conceivable that following a claim, the insurance company may also expect future future expenses and raise your premiums in anticipation - or worse yet cancel your policy.
A typical homeowners insurance policy has a $ 500 deductible. If the water damage repairs fall below that amount, definitely pay for repairs out of pocket If the water damage repairs are only slightly above your despair of pocket anyway because insurance companies are frequently worried about the likelihood of your policy may raise red flags, to raise your premiums than a single large claim. Should you switch insurance companies, these claims are registered in a national database which is accessible by all insurance companies. of claims filed and price your premium accordingly.
If the damage is covered, if the insurance company opens a claim, Once again, your claims history is considered by future insurance companies, so be careful about calling the insurance company directly. Instead, call your insurance agent or obtaining estimates from contractors before filing the claim.
Some state have introduced legislation prohibiting insurance companies from using some state of claims, such as weather events, to base insurance rating upon or imposes surcharges on the policy. Each state has its own insurance laws, so sure sure to browse your state & # 39; s insurance department & # 39; s web site before submitting, or not submitting, a water damage claim. For example, if your roof needs to be replaced after a windstorm, the resulting claim may not result in a premium increase depending on your state & # 39; s insurance laws.
In Texas, an insurance company can not raise your insurance premiums or deny coverage for an appliance - related water damage claim the following two conditions have been met:
o The damage was properly repaired and remediated
o The damage repair / remediation was inspected and certified
However, if three or more appliance-related water damage claims are filed in three years, then the insurance company can can increase your premiums or deny coverage.
So, which claims should you pay out of pocket?
o Any claims that fall below your deductible amount
o Any claims that you can reasonably afford to pay that could potentially raise red flags with your insurance company
Which claims should you submit to your insurance company?
o Any claims above your deductible amount that are protected from rate increase under your state & # 39; s insurance laws
o Major claims where extensive repairs are necessary and paying out of pocket is not reasonable.
Put these savings into an emergency account for out-of-pocket ___ ___ 0 ___ ___ 0 repairs.
