When you file a claim with your homeowner's insurance, you risk increasing your insurance rates, and, if your claim goes on a CLUE or A-PLUS database, this is like a permanent mark on your record that could make it difficult to buy insurance in the future. Bankrate.com says these three types of claims are the worst:
1. Dog bites
2. Water damage
3. Slip-and-fall injuries
Homeowner Insurance Blacklist
If your insurance company is one of the 98 percent of insurance companies that report claims to the Claim Loss Underwriting Exchange (CLUE) and Automated Property Loss Underwriting System (A-PLUS), then, yes, you've been marked. You haven't been blacklisted, but your insurance company might charge you higher rates than your accident-free neighbor. Bankrate says some companies will report mere inquiries, even if you don't file a claim; before you go into details about your incident, ask your agent if he or she is going to report your conversation to CLUE or A-PLUS. Insurance companies use data that goes back 5 years from CLUE and A-PLUS to set your homeowners rates. According to CashNetUSA, you can get a free copy of your CLUE report to keep track of how many claims you've filed.
Your dog might be permanently blacklisted, though. Select breeds are flagged by CLUE and A-PLUS for being aggressive dogs. Netquote.com says households that have these breeds might have a difficult time buying homeowners or rental insurance:
- Alaskan malamute
- Chow chow
- Doberman pinscher
- German shepherd
- Pit bull
- Siberian husky
Netquote says most insurance companies will take into consideration the individual dogs temperament, obedience training and other records before declining coverage. If you are declined, you might be able to purchase dog-owner liability coverage, which runs about $150 to $300 per year, according to DogBiteLaw.com.
When Not To File A Homeowner Claim
If the amount of damage and repair is less than your deductible, don't file the claim. If your deductible is $1,000 and the repairs are $500, it's a no-brainer: You'll pay it all out of pocket, so no need to tell your insurer.
Even though it's tempting to file a claim even for a small reimbursement, especially if you live on a shoestring budget, in the long run, you're better off if you bite the bullet. Set up a special savings account that covers your deductible, as well as an emergency fund.
When To Buy a Homeowner Warranty
For a few hundred dollars when you buy a home, a homeowner's warranty will cover things that your homeowners insurance will not. Typical warranties cover appliances, air-conditioning and heating, pumps and some electrical components. Not all are the same, so review your coverage in detail.
Buyer beware when it comes to home warranties. Angie's List members give home warranty service companies the worst grades of all Angie's List categories. When you have a home warranty, you are limited to the warranty company's selection for service providers, and you might have to pay a service fee to the provider. Ask your real estate agent for a recommendation on the best home warranty. If you find a good one, you'll be able to renew the policy annually. In older homes with aging HVAC systems and appliances, the few hundred dollars a month is worth it.
The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else.