Tennessee beware! Too many homeowner claims may very likely mean trouble for you later! I recently spoke to an individual who had a number of claims on his homeowners policy. He said, “I pay a lot for my insurance and I expect to get something back for my money.” As a general rule, homeowners insurance is not meant to be a maintenance program. It covers losses that are sudden and accidental. This is a common misconception. As a result of more claims being made in Middle Tennessee, premium increases and policy cancellations are on the rise.
2011 was the worst year on record worldwide for total claims payouts. Here in the Nashville area, the insurance industry paid out $1.25 in homeowner claims for every $1.00 they received in premiums. As a result, insurance companies are looking for ways to minimize their losses. Perhaps the greatest indicator that a policyholder will be cancelled is their frequency of claims. One large catastrophic claim will not usually result in a policy cancellation. But two or more smaller claims will likely get you cancelled.
Insurance claims frequency is a red flag and usually indicates some kind of negligence was involved. And once your policy is canceled in today’s insurance market, you’ll have a tough time finding a new policy. In the Nashville area, most major carriers won’t insure you if you’ve had two claims in the last five years. When you do find a company, your rate will likely be double - and you’ll be forced to take less coverage.
So what’s the moral of the story? Talk to your insurance agent before making a claim. At Johnston & Associates, in Brentwood, TN, we can advise you on how best to proceed when filing a claim. We represent a large number of insurance companies, so whether you have zero claims or five claims, please give us a call. We’ll find the best policy - with the best company. And we promise to keep our eyes on your bottom line.