Similar to how mortgage companies review your credit history before approving a loan, insurance companies review several types of information when quoting you a rate. It’s not strictly the home that determines your annual premium. In fact, insurance companies will even review your claim history. It’s important to understand the impact of claim history on MA homeowners insurance rates.
Why Claim History is Important
If you have filed past homeowners insurance claims, insurance companies believe that you are more likely to file future claims. This is likely the result of historical trends reviewed by the insurance industry. Naturally, insurance companies will review your history and use that to determine your level of risk. Just one claim in your history will have less of an impact compared to several claims.
Impact of Claim History on MA Homeowners Insurance Rates
Homeowners with a history of filing claims are generally charged a higher premium than those with clean histories. In some cases, you can even be denied coverage by MA homeowners insurance companies that deem you to be too high a risk.
Why is it important to know the impact of claim history on MA homeowners insurance rates? Before you file a claim, you may want to think about the overall impact. First of all, there will be a deductible, so insurance will only cover damages beyond that deductible amount. If your deductible is $1,000 and you have a claim for $10,000, then obviously it’s worthwhile to file that claim. However, if your damages are only $1,200, you might reconsider. Is receiving $200 in coverage going to be worthwhile if your future insurance premiums increase as a result? The increase could end up costing you much more. It’s certainly something to think about!