After One Claim Can My Insurance Company Drop Me?

dropped from insurance

Can My Insurance Company Drop Me?

Can My Insurance Company Drop Me?

It does not sound fair, but not only can an insurer drop you after a single claim, it can also drop when you have not made any claims. The insurance companies are more worried about future risks and can cancel your policy, especially if you live in areas prone to mudslides or hurricanes. In addition, filling more than one home insurance claim within a period of five years or having a claim that is not paid because it is less than your deductible, can also make you lose your insurance.

All insurance companies are there to make a profit. If these companies have any reason they will not make as much cash as they need, the insurer may cancel the high-risk policies that may cost them. Each insurance company sets guidelines on the maximum number of claims an insurance policyholder can claim before renewing the policy. The industry experts say that more often, the magic number is two. This means that most insurers will decline to renew your policy after you exceed two claims in a period of three years. According to many insurance agents; insurance policyholders with more than one claim in ten years is considered high risk.

Making more than one claim may not only subject you to lose your insurance coverage but could make it more expensive and more difficult when looking for replacement coverage. Your claims are also recorded in the comprehensive loss underwriting exchange database (CLUE) that makes your claims history available to other insurers making it hard for you to find an insurance company. Filing a claim can also make an insurer to raise your premium rates instead of canceling the policy.


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An insurance policyholder should get the largest affordable deductible from your insurer. For instance, if your deductible is $5000, you should only contact your insurance provider when you are rebuilding cost are at least 5,000 USD. This is because if you incur some losses, let’s say around $3,000 and you contact your insurance, your rates are likely to go up forcing you to spend more in the coming years.

Since the lenders require proof of insurance while you hold a mortgage, when an insurer drops you, you will need to get a new policy quickly. Remember, your house is the lender’s security and if you do not have an insurance policy the lender is forced to place insurance for you- as agreed in your mortgage contract. Since the lender is not worried about the premiums or the coverage’s, the other insurer may offer high rates that can end up costing you a lot of money.

Coastal Insurance Solutions specialize in homeowners insurance on Long Island and New York State.  If you would like more information about homeowners insurance, give us a call at 631-782-3175

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View the Coastal Insurance Video Library  to find helpful video’s explaining everything from, how to save money on Homeowners Insurance to an easy explanation of Flood Insurance. Call today (631-782-3175) to speak with one of our underwriting experts.  Fast Quotes, A.M. Best Rates & Free Advice.


Can Your Insurance Drop You?


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About the Author

David W. Clausen is the CEO of Coastal Insurance Solutions. With over 20 years' experience and over 1 billion insured, David and Coastal Insurance Solutions are the recognized leaders in high net worth insurance. For the fifth consecutive year, David Clausen has been awarded Top Producer by Insurance Business America. David is a trusted high net worth insurance expert who’s published more than 200 articles. His articles & press releases have generated over 500K pageviews and has been featured on blogs such as Google News, Yahoo Finance, CNBC, Market Watch, Fox, The New York Times, etc. David founded Coastal Insurance Solutions in 2001 after earning a BBA from the State University of New York College at Oswego.

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IBA's Top Retail Broker 2023
Digital badge for the 2023 Insurance Agents of the Year Award, featuring intricate design elements that symbolize excellence and achievement in the insurance industry.

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