Understanding the Impact of Multiple Claims on Homeowners Insurance: A Case Study
If you’ve recently encountered challenges with your homeowners insurance due to multiple claims within a short period, you’re not alone. Many property owners find themselves navigating complex insurance landscapes, especially when they own more than one property. Here’s an insightful look into a real-world scenario, along with key considerations to help you make informed decisions.
Background of the Situation
In August 2023, a homeowner in Texas replaced their roof following severe hail damage—a common occurrence in the region. Remarkably, this was their first and only insurance claim in 15 years of homeownership. Earlier, they had owned two homes simultaneously; eventually, they sold the Texas property last year and relocated to Colorado.
Since moving, they’ve experienced hailstorms affecting their new property’s roof, which is over 12 years old. A recent hailstorm prompted another claim. Currently insured through Connect, they’ve expressed dissatisfaction due to the policy being transferred to Homesite and noticeable premium increases over the past three years—from approximately $3,000 to over $4,300 annually.
Challenges Faced
During their renewal process, they contacted State Farm, only to learn that the company is tightening underwriting criteria, especially for applicants with multiple claims within a short timeframe. This has raised questions about how owning multiple properties and filing claims might influence insurance availability and pricing.
Key Questions to Consider
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Does owning multiple homes and policies influence the insurer’s decision-making process regarding coverage denials or premium hikes?
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Is it worthwhile to reach out to additional insurers, or are similar restrictions likely across the board?
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Would engaging a private insurance agent or broker possibly provide better options or counsel?
Insights and Recommendations
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Multiple Claims and Insurability: Insurance companies typically evaluate the risk profile based on claim history. While owning multiple properties can sometimes allow for differentiated underwriting strategies, many insurers view frequent claims as increased risk, potentially leading to coverage challenges or higher premiums.
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Shopping Around: It’s advisable to explore quotes from multiple insurers. Different companies have varying underwriting standards; what may be a barrier with one could be acceptable to another. Working with independent insurance agents can facilitate access to a broader pool of providers and personalized advice.
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Consulting an Insurance Professional: A seasoned insurance broker or agent familiar with multi-property portfolios can offer valuable insights and potentially negotiate better terms on your behalf. They can also help you understand how claim history and property ownership structure impact your coverage options.
Final Thoughts
