Will A Claim Increase My Insurance Premiums

When you purchase insurance protection for your home or for your automobile, you're doing so in the hopes that you'll never actually have to use it. If, however, you do suffer a loss that causes you to submit a claim on one of your policies, you may wonder whether this will cause you to experience an insurance rate increase. This is a question we commonly hear and, like many things having to do with insurance, there is no cut and dried answer besides, “it depends”.

The Risk Factor

When your insurer issued your homeowner's or automobile insurance policy, they did so with the expectation that you represent a good risk to them. This means that the amount of premium payments you'll be making to them will more than pay for any claims payments they're required to make on those policies. This allows them to earn a profit.

If they subsequently learn that your claims history indicates you're costing them money, it will cause them to increase your premium amount or discontinue your coverage altogether. You're no longer considered a satisfactory risk to them.

What Changes Their Risk Perception

Numerous factors can contribute to your experiencing an insurance rate increase, especially when it comes to auto insurance. Some of these include tickets for moving violations or being involved in accidents. The number of insurance claims you make will also have a direct effect on your rates. The more claims you file, the more likely you'll be experiencing an insurance rate increase.

With this in mind, sometimes it may not be worth filing a small claim that would otherwise qualify for payment under your policy. By the time your deductible is paid and you take into consideration a possible rate hike, it may actually cost you money to file a claim.

Assigning Fault

If you file a claim based on damage that's deemed to be your fault, you will likely find your insurance rate increased. If you're not found to be at fault, your rate may or may not increase, depending on your insurer. If you're rear-ended in your car while stopped at a red light – totally not your fault – or the aluminum siding is blown off your house during a wind storm, you shouldn't suffer a rate increase, but this isn't necessarily true. A history of previous claims may cause this last not-your-fault claim to raise your rates.

6 Facts About Named Perils

When you buy homeowner's (or renters) insurance, you're buying financial protection against losses pertaining to your personal property, or, “your stuff”. This includes your home's structure, exterior buildings such as a detached garage or garden shed, and everything within the walls of your home such as appliances, furniture, electronics, clothing, artwork, jewelry, etc.

While each homeowner's policy is different and may be custom designed to fit the policyholder's specific needs, the average homeowner's policy provides similar protections.

Named Perils vs. Open Perils 

Standard homeowner's or renters insurance policies protect against what are called “perils,” which are bad things that can happen to your property that cause you to experience financial loss. An “open perils” policy, sometimes called a “named exclusion policy” or an all-risk or comprehensive policy, covers any bad thing that can happen to your personal property except those things specifically excluded in the policy. In a “named perils” policy, however, only the perils specifically listed within the policy are covered. Here are some key factors to understand about named perils:

1. Named perils can basically represent whatever specific protection you desire in your policy, as long as the insurer agrees and you're willing to pay the cost of the policy that they charge for that protection.
2. Most standard policies cover 16 named perils: 1. Fire/lightning damage, 2. Windstorm/hail damage, 3. Explosions, 4. Riot, 5. Being hit by aircraft, 6. Being hit by a vehicle 7. Smoke damage, 8. Vandalism, 9. Theft, 10. Falling objects, 11. Ice, snow or sleet damage, 12. Accidental overflow or discharge of steam or water, 13. Sudden, accidental cracking, burning, bulging or tearing, 14. Freezing, 15. Sudden, accidental damage caused by short-circuiting, 16. Volcanic eruption.
3. Most standard homeowner's policies do not cover for damage due to floods or earthquakes. Coverage for these perils must be obtained by taking out separate policies or having a special amendment to your standard coverage.
4. Compensation for a covered loss under your homeowner's policy will only be paid after subtracting the amount of your deductible.
5. A named perils policy only pays for losses caused by a peril specifically spelled out in the policy. If, for example, it doesn't say you're covered for sewer backup, you aren't. As the insured, the burden is on you to prove that your loss was caused by a named peril in your policy.
6. Because only specific perils are covered, these policies are typically less expensive than open perils coverage.

7 Common Business Insurance Claims

Whatever type of business you're in, one undisputed necessity in running a successful business in Greensboro is the protection provided by quality Greensboro business insurance. When business owners purchase a business insurance policy it's likely not in anticipation of suffering a loss that may occur in the daily running of a business, but more for some catastrophic event such as a fire that will totally devastate their business.

While it's true these types of disasters should be properly protected against with quality insurance coverage, there are numerous smaller risks that businesses face in their day to day activities. It may surprise you to learn what types of losses are most prevalent to most businesses on a regular basis, especially smaller businesses.

The Most Common Business Insurance Claims

A nationally recognized property insurer conducted a study in 2015 consisting of a compilation of claims information submitted by more than one million small business policyholders over a five-year period of time. According to this study, it was estimated that approximately 40% of all small businesses will experience some type of loss, either liability or property, within a 10-year period.

Following are the most common types of claims submitted by small businesses:

1. Burglary/Theft – making up a full 20% of annual business insurance claims, burglaries and thefts may be perpetrated by dishonest employees or by outsiders. These claims include not only the cost of lost products and merchandise, but also the cost of damages suffered by break-ins.
2. Water and Freezing Water Damage – accounting for about 15% of annual business insurance claims, these claims may involve roof damage, broken water pipes or a leaking appliance such as the water heater.
3. Wind/Hail Damage – accounting for another 15% of claims, wind and hail damage can affect your structure, out buildings, automobiles and outside equipment.
4. Fire – causing about 10% of business claims, fire damage can be considerably destructive and expensive to remedy.
5. Slip and Fall Injuries – making up about 10% of business insurance claims, add to this another 5% for injuries caused by something other than a slip and fall such as a heavy object falling off a shelf and hitting someone's head.
6. Reputational Harm – your Greensboro business insurance policy covers you against slander and libel claimed by a third party as damaging to their reputation.
7. Product Liability – representing less than 5% of claims, these claims can be extremely expensive.