In our area, there have been a couple of hailstorms in the last 15 years
that drove the insurance replacement of thousands of roofs.
The only people whose insurance went up were people with multiple claims in
addition to the hail damage.
We had a fire in 1999 that ended up costing our insurance company (St Paul,
now Metlife) over $110,000. We paid a $100 deductible, are still with the
same company and our premiums have yet to go up.
Keep in mind though...................."acts of god" or not.....if you
have that claim and another they CAN drop all your insurance. No
questions asked. They only have to give you notice.
I speak of experience. :-)
"In weather-plagued Texas, homeowners can't be dropped because of claims based
on weather. But Texas will allow insurers to nonrenew if you file three
non-weather-related claims in three years. "
My wife got dropped before we got married. But her claims were non-weather
Ten or fifteen years ago premiums did not increase when you made claims,
unless you made enough claims that they singled you out. But that was
when they were making a lot of money in the stock market, and were not
losing a lot of money on claims they had not forseen.
In more recent years, they are not making as much on investments, and
they have lost quite a bit on claims that were not forseen (primarily
the mold hysteria).
So today they are not as eager to sell homeowner's insurance, and their
policy seems to be to refuse to renew policies, rather than to raise
So the answer to your question varies from company to company, and no
one other than the company itself can answer your question, and they
Years ago I filed a claim when the garbage men took my outdoor grill (it
was a little rusty, but it still worked) "by mistake"; I probably
wouldn't file that claim today. If the damage to my roof was minor or
cosmetic, I wouldn't file a claim; but if a reroof is required, I would
be inclined to file the claim.
That's not the only reason. Over the past decade or so many insurance
companies have changed from the mutual company organizational model to
the stock company organizational model. In a mutual insurance company
model, there are only two parties at the table: the private owners of
the company and its policyholders. In a stock insurance company model,
you've now got a third party at the table: the shareholders. The
profits must be divvied up three ways now, instead of two. And the
company's officers will be more highly motivated to please the
shareholders than the policyholders.
When it's essential to keep profits up in order to keep the
shareholders (and the market) happy, the insurance company will have a
couple obvious strategies to employ: tighten up on paying out claims,
and and cherry-pick their customers. Hey - it works if you own stock
in the company.
If that were so, one would expect that all types of insurance would be
affected, not just homeowners'.
By your explanation, the "private owners" of mutual insurance companies
are in the same position as the shareholders of a stock company! In
fact, a mutual company is owned by the policyholders, and they get their
return on investment through lower premiums or earnings distributions.
I had a policy in a mutual company that converted to a stock company;
the reason they gave was better access to capital. I've seen no changes
in terms of coverage or processing since the change, but I like the idea
that I can keep my stock, even if I cancel my policy or switch to
The explanation I initially advanced came from a mutual insurance
company I have policies with, and they are pretty honest and open about
how they do business, and from some financial newspapers.
That's the only claim I've ever made. I had bad hail damage about 3
years ago (just before Christmas). The insurance company actually paid
more than the new roof cost. I didn't claim anything for tall the
HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.