Everyone knows that an insurance claim is making demands on your policy after damage. How then does one define an insurance claims history, and how does it come into play?
What is an Insurance Claims History?
A person’s insurance claim records are documented in their claims history. Claim details become part of your claims history once an incident of loss occurs and a claim is filed. This history includes facts such as how much money was paid out, how much damage was caused, and so on.
Your insurance prices are influenced by your claim history, which insurance companies consider when quoting you a policy. For the most part, they’re just interested in the preceding three to six years. A recent assertion is more important than a previous one, in many opinions.
Claims history is similar to a person’s credit history. However, instead of documenting their financial transactions, it keeps track of how much insurance they’ve used.
What role does my claims history have in determining my level of coverage?
Insurance companies use various criteria to determine your coverage and costs, but claims history is one of the most relevant. An insurance underwriter isn’t interested in a claim-filled background. If you have a history of claims, you’ll pay more insurance premiums because of this correlation. The severity of your condition may prevent them from providing any insurance coverage at all.
The amount of premiums you pay will rise vary from one policy to the next and from one insurer to the next. It’s important to note that certain claims are more severe than others. Homeowners’ insurance premiums might rise due to water damage claims, as water damage typically leads to costly repair concerns like mold. Claims that were made recently have a more significant impact than those that were made five or six years ago.
On the other hand, a clean claims history is precisely what insurance underwriters are searching for. Claims-free status demonstrates to the insurance company that you can avoid unnecessary losses. If all your home insurance claims have come from the same place, it indicates you’re taking good care of your house. Most insurance companies discount customers who have not had any claims.
