Claims History and New Homeowners' Application

[clcl3]

I changed from Company A to Company B. About 7 months after the change, I learned from a contractor going door-to-door that I had sustained hail damage during a storm. (Before the contractor visited me and inspected the roof, I didn't think I had any damage.)
This incident occurred while I was insured by Company A, but the time I filed the claim I was insured by Company B. Company A paid the claim.

My rates with Company B have increased greatly in the past 2 years, so I asked them what I could do to lower my premium. Company B suggested I consider a cheaper policy with less coverage. They said I had to file an application to get this cheaper policy that offers less coverage. In reviewing this new application, it asks about any claims filed within the past 5 years.

When I first signed up with Company B, I had not had any claims. But now, I do because I filed the claim with Company A after learning of storm damage well after I switched to Company B.

Won't Company B already know of that claim with Company A? Don't they re-check everything when they offer to renew their policy? Isn't that loss already factored into my premiums? Should I expect the rates on this new application for a cheaper policy to sky rocket because of that claim with Company A?

Do I need to worry? Thanks for any suggestions or thoughts you can share.

 

[USF3983]

In my experience, in my state (Florida), premiums don't go up because of claims. Eligibility gets restricted though. Companies seem to differ in how they underwrite it.

Some will usually allow for 1 act of god loss. Sometimes they will restrict you on how much damage was paid out ($10,000 seems to be the cut-off with some companies.)

They will know about it though.

 

[djs]

Sleazy contractor.......

Outside of that, what USF said, but realize your state will play a big role in the answer to your question.

Either your rates went up because of the surcharge for the claim, or it was classified as a cat loss (catastrophic, or weather related, or act of god type of thing) and cat losses tend not to directly impact premium. Of course, the number of claims that cat losses cause will almost always cause carriers to raise premiums. Just happens.

Answer the questions honestly. If you prefer, shop elsewhere and see what you can get for premiums with other companies.

Dan

 

[benwrigh]

I changed from Company A to Company B. About 7 months after the change, I learned from a contractor going door-to-door that I had sustained hail damage during a storm. (Before the contractor visited me and inspected the roof, I didn't think I had any damage.)
This incident occurred while I was insured by Company A, but the time I filed the claim I was insured by Company B. Company A paid the claim.

My rates with Company B have increased greatly in the past 2 years, so I asked them what I could do to lower my premium. Company B suggested I consider a cheaper policy with less coverage. They said I had to file an application to get this cheaper policy that offers less coverage. In reviewing this new application, it asks about any claims filed within the past 5 years.

When I first signed up with Company B, I had not had any claims. But now, I do because I filed the claim with Company A after learning of storm damage well after I switched to Company B.

Won't Company B already know of that claim with Company A? Don't they re-check everything when they offer to renew their policy? Isn't that loss already factored into my premiums? Should I expect the rates on this new application for a cheaper policy to sky rocket because of that claim with Company A?

Do I need to worry? Thanks for any suggestions or thoughts you can share.

The only way Company B will find out about it is if they run a loss report at renewal. I have not heard of this happening on a homeowners policy.

 

[sshafran]

Sleazy contractor.......

Why is he sleazy? Wouldn't a claims adjuster confirm the damage before paying out a claim?

Just curious.

Seems to me, as a L&H guy, that P&C agents hate claims because it affects their bonuses. To draw an analogy, would we call a Doctor sleazy for telling someone to make a medical claim for cancer treatments? Same thing, you typically don't know you have cancer until a doctor tells you that you have it.

 

[benwrigh]

Why is he sleazy? Wouldn't a claims adjuster confirm the damage before paying out a claim?

Just curious.

Seems to me, as a L&H guy, that P&C agents hate claims because it affects their bonuses. To draw an analogy, would we call a Doctor sleazy for telling someone to make a medical claim for cancer treatments? Same thing, you typically don't know you have cancer until a doctor tells you that you have it.

As a P&C agent, we call them sleazy contractors because they go door to door and EVERY roof that they "inspect" needs to be replaced...

 

[FL P&C Broker]

There has been a lot of contractors down here in Florida that have convinced homeowners to make roof claims on perfectly fine roofs.

 

[nyc2phi]

I changed from Company A to Company B. About 7 months after the change, I learned from a contractor going door-to-door that I had sustained hail damage during a storm. (Before the contractor visited me and inspected the roof, I didn't think I had any damage.)
This incident occurred while I was insured by Company A, but the time I filed the claim I was insured by Company B. Company A paid the claim.

My rates with Company B have increased greatly in the past 2 years, so I asked them what I could do to lower my premium. Company B suggested I consider a cheaper policy with less coverage. They said I had to file an application to get this cheaper policy that offers less coverage. In reviewing this new application, it asks about any claims filed within the past 5 years.

When I first signed up with Company B, I had not had any claims. But now, I do because I filed the claim with Company A after learning of storm damage well after I switched to Company B.

Won't Company B already know of that claim with Company A? Don't they re-check everything when they offer to renew their policy? Isn't that loss already factored into my premiums? Should I expect the rates on this new application for a cheaper policy to sky rocket because of that claim with Company A?

Do I need to worry? Thanks for any suggestions or thoughts you can share.

There is really no way to get around your situation...

If you don't mention anything, you woud be lieing and if you shop around the other carriers will see the claim.

I suggest shopping around even with the claim to see if you can get a better deal without scarficing your coverage.

 

[djs]

Why is he sleazy? Wouldn't a claims adjuster confirm the damage before paying out a claim?

Just curious.

Seems to me, as a L&H guy, that P&C agents hate claims because it affects their bonuses. To draw an analogy, would we call a Doctor sleazy for telling someone to make a medical claim for cancer treatments? Same thing, you typically don't know you have cancer until a doctor tells you that you have it.

They are sleazy because they are shopping for work, not looking out for the homeowner. On the surface, it sounds like they are, but in the end, it makes premiums go up, frequently for work that didn't really need to be done.

I watch it happen all the time on fence claims. A couple of sections blow over, the contractor tells the homeowner to file a claim. They do, the insurance company will pay for the couple of sections, but the contractor says the whole fence needs to be replaced, they can't replace the 2 sections. Of course, the fence is 40 years old, which the insurance company is not responsible for, but the contractor bad mouths the insurance company and a complaint gets filed and on and on.... Then the renewal premium comes in with the claim. Oops, better off not filing for that fence, the contractor didn't talk about this.

Chiropractors near me hit the sleazy label a lot as well. Had an auto accident? Don't think you were injured? Come in, we'll check you out and see how much we can get from the insurance company anyway.... Okay, they put it differently.

No problem with filing claims when claims need to be filed. When a doctor or a contractor is looking for work, its a different story. And yes, they shop for work.

Dan

 

[Accelerated]

Why is he sleazy? Wouldn't a claims adjuster confirm the damage before paying out a claim?

Just curious.

Seems to me, as a L&H guy, that P&C agents hate claims because it affects their bonuses. To draw an analogy, would we call a Doctor sleazy for telling someone to make a medical claim for cancer treatments? Same thing, you typically don't know you have cancer until a doctor tells you that you have it.

Some are sleazy, some are not. Fact is, roofing contractors have a tendency to canvass a neighborhood telling everyone in the neighborhood that they have hail damage. Some contractors follow the published hail tracks, only hitting areas that did in fact have reported hail large enough to cause damage. Many contractors simply send inexperienced sales forces into any neighborhood, and neither of the two has a stellar track record when it comes to actually performing a roof inspection prior to convincing the insured to file a hail claim.

Your analogy might be more accurate if a doctor was telling every patient to file a claim for cancer treatments prior to examining the patients.

With regards to an adjuster confirming damages prior to paying a claim, most of the time, this is accurate (some carriers are handling small claims from the desk, and probably paying out on claims that they should not be), but it still costs the carrier money, and that cost is passed on to the consumer via premiums. Whether they salary staff adjusters and provide them company software, vehicles, fuel, benefits, pay for matching SS, medicare, workmans comp, payroll tax, etc, or they hire an independent adjusting firm like ours, the cost of handling frivolous claims caused by contractor canvassing is astronomical.

Even during the busiest of seasons, a minimum of 10-15% of hail claims are claims in which there is zero damage. Many times, the insureds themselves are aware of this, but "feels like having someone check it out is the prudent thing to do, since the contractor said...". A shocking number of insured's state something to the effect of "We didn't even know it hailed here, but the contractor said...". The follow up question reveals even more about this harsh reality: "Did the contractor actually get on the roof and inspect it?". What percentage do you think answers in the affirmative? (Spoiler: Almost none).

So yes, there are a lot of good contractors out there, and there are a lot of "sleazy" contractors out there, too. A contractor that makes a declarative statement regarding damages and advises a homeowner as to actions that should be taken that could result in the raising of policy premiums to the homeowner and causing additional cost to a third party (the carrier), without taking the time to actually perform an inspection and confirm the presence of physical damage would indeed fit the definition of "sleazy".