I am so confused...we pay insurance premiums for our homes yet..if I'm understanding correctly... if we actual

Question

if we actually use the theft insurance ..our rates go up? i thought that's why we bought insurance with a theft policy..otherwise... why bother.

Answer 1

You are right, it could go up. However, if you have had your coverage with one company for a while, say 10 years or more, you are looked at with a little different perspective from the company's standpoint. You have paid in premiums for many years, and have had one loss. That does no make you a bad risk, and the rates may not change at all. However, if you are a new customer and have a claim, the company will be concerned that you are a high risk client, and will raise your rates to protect their future losses with you. Think of it this way, the company has $100,000 of coverage for the house, $50,000 for the contents, $10,000 for other structures, and $300,000 in liability exposure for you. Their exposure is now $460,000 on what you have. You pay them $1000 a year for this. Would you want to take my $1000 and promise to pay my losses up to $460,000? This is the risk they all take. I would not want to expose myself to a half million dollar loss for $1000 lousy bucks!

Answer 2

That is simply the way insurance works.

If you have a lot of claims it is more expensive for the company to cover you. They are in the business to make money like any other company.

It is a little like running a restaurant with an all you can eat buffet. If you set a price that is too low people will literally eat your business away from you.

If you have a good price, but all of a sudden 20 really big eaters suddenly start showing up every day, then you will have to raise your price.

It is based on statistics. If you claim once, the chances are MUCH greater that you will have another claim (i.e. live in an area with a crime spree or high crime in general).

ALSO:
If you really have a problem, file a complaint with your state's department of insurance. The number should be either on your policy or can be had with any reasonable search of your state government's website.

Answer 3

The purpose of INSURANCE is to restore as things were. This means that if you have a loss, the insurance pay out would compensate for the loss. Life, auto, home insurance all aim at this task.

Some people think they are suppose to have losses, and get insurance to cover the loss. Insurance companies believe that you are not suppose to have a loss. Therefore if one occur, insufficient care is taking place; therefore increase payments would be due on the covered policy.

Answer 4

Yes. Because statistics show that people who have ONE theft, are MUCH MUCH MUCH more likely to have another theft claim. So, they become higher risks.

When you buy insurance, you get lumped into rating categories with other similar people. So once you put in ONE claim, you get moved to the category of people with ONE claim. When you put in three or four claims, you get put in with everyone else that has three or four claims.

It's just like auto insurance - have a claim (accident) and you're likely to have a second one. Sorry!

Answer 5

Unfortunately, with precious few exceptions, this is how most insurances work. Like when you get into an accident in your car and your insurance goes up. Just judge how much you've lost and how much you think it'll go up and make a choice. (If I get a fender bender I won't report it, but if my car is totalled I'd rather pay higher rates and get a new car, you know?)

Answer 6

if you have a mortgage you have to have insurance!!!!

if you file 2-3 claims within 2-3 years good luck trying to find cheap insurance!!!

umm homeowners insurance alway coverage persoanl property with at least 50 percent of the dwelling coverage. It jsut something standard on a homeowners policy.


also you shiould check with your insurance agent if personal property is replace at replacement cost, NOT Acv (which is depreciation)


umm if you have loss of personal perperty, over your deducable amount you shiould file a claim. Most company wont raise your rate over one claim or drop you!! do dont worry, IF you have insurance and need to use it, then use it them, that what it for!!!

most things covered on personal property are only covered for 1000-1500 per item. like jewry or electronics. but umm call your agent. there bored at work!!!!

Answer 7

Ah, just one of the reasons insurance companies have got you by the short and curlies. Don't be surprised if you file a claim and they cancel your policy.

Now...who's the REAL thief?

Answer 8

It is because insurance companies are money hungry crooks. I have been dealing with them for years and they are all the same. They all want you to pay but if they have to pay it is like a crime and takes years to solve.

Answer 9

Check under "legalized extortion" in the dictionary, insurance companies are not going to loose ANY money...period.