Homeowners Insurance Claims

The short answer is yes, but how? To understand how these changes occur we have to also look at how our world has changed over the last 10 years especially. Most of us own computers and many of us walk around with one in our pocket daily called a smartphone. These advancements have also flowed into the realm of homeowners insurance where the rating structures and underwriting guidelines have grown to be more sophisticated.

That's a good thing, right? Well, in some ways yes and in some ways it is definitely not. While the upside is that we may get rewarded for the personal aspects of how we run our lives, such as discounted rates for good credit or for replacing the roof on our houses to get a discount, we may also fall victim to the "progress" that computerized homeowners insurance systems have made.

Most people file a claim and do their best to mitigate damage and reduce costs to the insurance company. People expect this to make a difference in their prices when they find the best contractor and the best rate and do right by their home insurance company. If a computer decides the rates, how can this possibly help? Does this fit as a factor into the rating structure? Sadly it does not.

Consumers make the assumption that since our 1, 2 or often more claims don't even add up to a large amount, especially to a homeowners insurance company, that they are safe from worry about being forced into a high risk home insurance category due to homeowners insurance claims history.

The computers call the shots and often a human never looks at your policy. The algorithm does not look at things on an individual basis and consider many factors that do in fact matter. Most people are shocked to learn that many insurance companies make no distinction between a weather claim or a vandalism claim. What is even more upsetting for many to find out is that for many insurance companies the frequency of claims is more important than the severity. Who would guess that it can be better to have just 1 claim that is $100,000 than is it to have 3 claims that don't even add up to $5000? Does it make sense? The computer says it does and the days of looking at situations on a case by case basis are soon to be gone by the wayside with most insurance companies.

These customers often end up with substandard lender based or FAIR plan policies when labeled as high risk homeowners. Finding homeowners insurance with claims can be a cumbersome process for these consumers. All of these lessons are learned the hard way after filing claims due to the lack of information available today. Many claims would never have been filed had the consumer know the consequences for doing so.