Home Insurance Articles
How A Claim Due To A Fire Affects Your Future Home Insurance Quotes
2010-03-29
One of the most devastating things a homeowner can have happen to their home is damage, or an entire loss by fire. Regardless of the reason for the fire - faulty wiring, lightning strike, or arson - rebuilding after a serious fire can take a substantial amount of time and effort. Although all home insurance policies will cover at least some fire damage, the specifics of what will be covered and to what extent can differ greatly by company and with each type of home insurance coverage purchased. A basic or "known perils" policy, for example, will have more limited coverage than a broad or comprehensive policy. In either case, a home insurance company will be obligated to pay out some amount to the homeowner. But how does this payout affect both current premiums and future home insurance quotes?
The fear from homeowners is that any claim, no matter how small, will result in a large increase in their current home insurance rates and, should they choose to move to another company, far higher home insurance quotes. The fact of the matter is that an insurance company's response to a fire claim will depend greatly on the policies of the company itself in addition to any actions taken by the homeowner. Some home insurance providers, for example, will offer a policy whereby the first claim made on the policy, within certain guidelines, will not cause rates to increase. With rising competition in the home insurance market, this and other similar policies are becoming more common as companies are forced to fight for consumers' insurance dollars.
Future home insurance quotes after a fire claim can also be affected by actions taken by the homeowner both before and immediately after a fire. It is always advisable for a home owner to take a short video or have a well-documented paper trail of all items of value in the home, and to then give that video or documentation to a friend or neighbor for safekeeping. The more accurate and detailed the list of items in a home, the quicker monies will be disbursed and the less inclined the insurance company will be to suspect fraud. A similar principle applies immediately after the fire. Do not, under any circumstances, misrepresent the amount or value of possessions in the home that were destroyed. Err on the side of caution and come to an agreement with the home insurance provider before the claim is settled.
By purchasing comprehensive home insurance coverage, dealing with a company that has a reasonable policy on first claims, and being upfront in all dealings with the company, a consumer can help limit the effect a fire claim will have on future home insurance quotes.