When you have a claim you expect your insurance company to protect you. Most will for the first couple of times….BUT what if you have multiple cclaims in a year or over a few years
Many don’t realize the mindset of insurance companies at a corporate level. Insurance firms are for profit which means that bottom line they exist to make money. Now, ethically and legally they are bound to fulfill their obligations to the consumer when disaster strikes. However, there is little preventing the insurer from getting out of the contract if it becomes unprofitable. With due notice to the consumer they can cancel or non renew due to multiple claims in a short window especially if they can demonstrate that the claims were not all acts of God.
I’ve enccountered this situation several times. Most recently a gal who I will call Susan who has been with a certain major name brand insurer for a long time and experienced four major claims in the last few years. As a result she received notice from her insurance company explaining they were non renewing her. In helping Susan I was able to get her a replacement policy with a small brokerage firm, but for comparable coverage the cost was just over double that of her current premium.
My heart goes out to Susan since most if not all the claims were unavoidable in her case. I got to thinking how to avoid this situation. There are two courses of action that help reduce the likelihood you will be blindsided in the same way Susan was.
First get to know your agent well. Your agent is your liason with your insurance company. They are able to help walk you through the terms of your contract and be there for you before you start getting nasty communications from your company.
Secondly, bear in mind the profitability model that all businesses including insurance companies operate under. A coffee shop does not give away free coffee without a plan to grow business nor do insurerers pay claims without counting their costs which involves from time to time getting rid of or up charging “bad” risks.
With that in mind, it is important to consider carefully before making a claim, especially if you are several claims in. You might want to ask yourself can I afford this, what are the long term consequences etc. You might also consider switching to a company that has terms that are more favorable to you.
Above all talk to your agent they are there to help you. If you need an agent give my office a call (719) 247-0008 or fill out the contact form.