I know it sounds backwards and many people will say being able to submit a claim when something happens is why they have insurance in the first place! However, submitting a homeowner insurance can actually cost you more money in the long run and the claim remains on file for 5 years. That is why it is important to consider these 3 factors before making the final decision to submit a homeowner insurance claim.
Claims May Add Surcharges
Most insurance carriers surcharge an existing homeowner insurance policy once a customer submits 2 or more paid claims in a 5 year period. Even if a policy has 2 paid claims costing $500 or 2 paid claims costing $50,000 in a 5 year period, the homeowner insurance policy will still have the same surcharge. Thus, before submitting a claim it is important to consider the estimated cost of a claim and how much your insurance carrier may surcharge the policy.
A CLUE Records All Claims
In a our prior blog post “Get A C.L.U.E – A Carfax Report for Houses”, we talked about how a CLUE report shows homeowner insurance claims on a property for the past 5 years. However, did you know that all homeowner insurance claims submitted to the insurance carrier are documented on a CLUE report regardless if the claim is paid or not. Thus, it is always good to talk with your insurance agent to understand if your claim is covered or excluded before it goes on a CLUE report for the next 5 years.
Claims Information Can be Available to Buyers
Home buyers and real estate agents can now get a CLUE report by requesting the seller to purchase a CLUE Home Seller’s Disclosure Report from Choicepoint. This special CLUE report removes all the personal information about the property owner but it still has the 5 year claims history. Thus, it is important to remember that submitting a homeowner insurance claim could impact a future real estate transaction.
Overall, submitting a homeowner insurance claim can be a very smart decision but make sure to consider all the implications of a claim with your agent before submitting one. Being surprised when your next homeowner insurance bill comes in the mail or when you try to sell your home is never a fun experience.