Home Insurance contracts differ in all States; they are all governed by the Department/Division of Insurance dictating exactly how to abide by the rules of the particular State.
Once abiding by the rules of each State, carriers also have differences in handling claims and policy adjustments thereafter. In States where a Claims Free discount is allowed, the discount will be removed on the following renewal if a claim has been filed, there may also be a claims surcharge assessed in addition.
Some carriers have allowances for small claims below a certain pay out whereby the insured would lose the Claims Free discount but not be assessed a further surcharge. Since it will be close to impossible to get a clear answer to this question, the following is the best rule of thumb for policyholders: DO NOT USE YOUR INSURANCE POLICY AS A CHECK BOOK!
Property Insurance is meant to protect the insured against unforeseen and unaffordable sudden & accidental perils. The home should always be well maintained and display pride of ownership for 'preferred' risks.
For example, if due to high winds a branch would be blown off a tree and simply break a window or damage a few roof tiles, this is typically not what one would purchase insurance for; on the other hand, if there is an unforeseen electrical fault causing a house fire or perhaps the occurrence of a devastating storm, this is where insurance becomes an essential part of the recovery process.
Insurance contracts are designed with a Deductible; the deductible is the amount deducted from a Claims Payout. The actual purpose of the Deductible is to reduce the carrier's risk exposure to small claims, the lower the deductible, the higher the premium.
Clients that purchase insurance with a higher deductible make a statement acknowledging that small claims will not be brought to the carrier thus prompting the carrier to accept a lower premium for a lower risk exposure.
Once a claim is filed with a Home Insurance Carrier, a claims number is assigned and the claim is reported electronically to the National Claims Database (CLUE). The purpose of this reporting process is for the industry to share information regarding the risk thereby deterring any dishonest practices in attempting to misrepresent risk to an alternate carrier at a future point. This is a great tool that has been used for many years preventing carriers from taking on adverse risk.
The answer to this question was carefully orchestrated to provide a better understanding regarding the underwriting and claims process which would lead ultimately to premium assessment. It is strongly suggested that home owners fully understand this process and contact a licensed professional to answer any further questions regarding the process.
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Once abiding by the rules of each State, carriers also have differences in handling claims and policy adjustments thereafter. In States where a Claims Free discount is allowed, the discount will be removed on the following renewal if a claim has been filed, there may also be a claims surcharge assessed in addition.
Some carriers have allowances for small claims below a certain pay out whereby the insured would lose the Claims Free discount but not be assessed a further surcharge. Since it will be close to impossible to get a clear answer to this question, the following is the best rule of thumb for policyholders: DO NOT USE YOUR INSURANCE POLICY AS A CHECK BOOK!
Property Insurance is meant to protect the insured against unforeseen and unaffordable sudden & accidental perils. The home should always be well maintained and display pride of ownership for 'preferred' risks.
For example, if due to high winds a branch would be blown off a tree and simply break a window or damage a few roof tiles, this is typically not what one would purchase insurance for; on the other hand, if there is an unforeseen electrical fault causing a house fire or perhaps the occurrence of a devastating storm, this is where insurance becomes an essential part of the recovery process.
Insurance contracts are designed with a Deductible; the deductible is the amount deducted from a Claims Payout. The actual purpose of the Deductible is to reduce the carrier's risk exposure to small claims, the lower the deductible, the higher the premium.
Clients that purchase insurance with a higher deductible make a statement acknowledging that small claims will not be brought to the carrier thus prompting the carrier to accept a lower premium for a lower risk exposure.
Once a claim is filed with a Home Insurance Carrier, a claims number is assigned and the claim is reported electronically to the National Claims Database (CLUE). The purpose of this reporting process is for the industry to share information regarding the risk thereby deterring any dishonest practices in attempting to misrepresent risk to an alternate carrier at a future point. This is a great tool that has been used for many years preventing carriers from taking on adverse risk.
The answer to this question was carefully orchestrated to provide a better understanding regarding the underwriting and claims process which would lead ultimately to premium assessment. It is strongly suggested that home owners fully understand this process and contact a licensed professional to answer any further questions regarding the process.