I have been having this discussion with my parents, who are afraid to put in a claim on a leak they had. They're scared that their insurance company will drop and then blackball them. Can insurance companies do that?
I don't know if they will drop them or blackball them but the insurance rate will probably go up at renewal. Some companies raise their rates so high on renewal it is almost like being dropped. Some companies will let one claim slide by. It really depends on the company and the agent you are working with.
Here is a way for your parents to get some piece of mind on whether or not they should file a claim.
1. If they call to inquire about filing a claim, it will probably show up as a claim even if nothing is paid. An inquiry about making a claim is very common and will affect the insurance rate other companies will charge if they try to move to another company.
2. They can have some contractors, preferrably at least 3, come out and give some estimates. If the damage will cost $1200 to repair and the deductible is $1000, it might be better to pay the extra $200 to avoid a 5 year up charge for having a claim.
3. Call another agent from the same company as if you are looking for a quote and ask how one claim would affect your rate if you are already insured with them. This doesn't mean what the agent says is 100% true because they are trying to win your business, but it may be an enlightening conversation.
4. Lastly, they paid for the insurance and can make a claim if they want to. Just be aware many insurance companies charge for a claim for up to five years.
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