When Cancellation isn’t Your Decision

When Cancellation isn’t Your Decision

April 16, 2021

Can your insurance company drop you after just one claim? Absolutely. In fact, your insurance company can choose to cancel your policy before you make any claims. While this may be disconcerting, it’s a reality that you need to understand from the beginning.

Like most businesses, insurance companies are working to maximize profit. They employ actuaries, conduct research and even pay close attention to weather hazards. If the company becomes too concerned about future risks in certain areas that they deem to be dangerous, they may choose to cancel policies before anything bad happens.

Experts say that people who have more than one claim in a 10-year period can put you in danger of cancellation. Some companies may use a smaller window of just three years. Whatever the case, filing a claim usually causes insurance rates to go up and can increase the likelihood of your policy being cancelled.

Choosing to change insurance companies on your own doesn’t always guarantee a lower rate, as insurance companies can look up your claim history and set premiums based on the number and type of claims you’ve had in the past decade.

One of the best ways to protect yourself is to get a large deductible on your insurance policy. This should lower the cost of the premium. It’s also wise to avoid contacting your insurance company for repairs that are close to the cost of your deductible. While you may get some payout from the insurance company, your premiums will likely go up, making that small payout turn into a higher cost for you in the long-term.

When you’re ready to switch your homeowner’s insurance, give us a call! We’ve been helping clients save money and protect their homes for decades. Our team can make the insuring process smooth and painless so that you can live worry-free. To reach us by phone, call (715) 754-5254 or (920) 822-3695. You can also email us at insurance@premiercommunity.com or visit www.yourpremierinsurance.com to learn more.