The Effects of Burglary Reports on Homeowners Insurance

The purpose of homeowners insurance is to protect a homeowner from monetary loss. Theft coverage is available with homeowner’s insurance so that you can replace private property that’s lost if you are robbed. While most homeowner policies cover losses due to theft, an insurance company may make modifications to your coverage or adjust the cost if you file a theft claim.

Higher Premiums

Some insurance providers will improve your premiums if you file a theft claim, though it depends on the terms set forth by your insurance company. An increase in premiums is more likely if you’ve filed other claims with your insurance carrier in the past, or if you’ve filed multiple claims for losses due to theft. You will pay higher insurance rates from the start if you live in an area that accounts a high incidence of theft.

Policy Cancellation

The Washington State Office of the Insurance Commissioner points out that some insurance providers will cancel a policy if a homeowner records a lot of claims or theft accounts. A company may state in its coverage that it has the right to modify or cancel your coverage depending on the number of claims you file. While not all companies will cancel the coverage, a company might charge you a higher premium based on the number of claims you’ve filed. Even in the event that you haven’t reported a reduction or opened a claim in the past, insurance companies view this as a potential for reduction. The National Association of Insurance Commissioners recommends studying your coverage so that you know upfront how the forms and number of claims you record will influence the cost of your premium and whether the insurer will renew your coverage (see Reference 4). According to the NAIC, an insurance company may cancel your coverage if you become a significantly higher risk. An insurer may also choose not to renew your coverage, but must provide you notice. The number of times varies from state to state.

Deductible Charge

In some cases, homeowners have been billed a deductible when filing a claim associated with burglary. This is the money you pay off prior to the coverage pays any cost of this reduction and needs to be outlined in the specifics of your homeowners coverage. The quantity of deductible that you must pay will be based on the deductible you chose at the time you purchased the insurance policy. If the theft involved only a minor loss, you may not wish to file a claim if a deductible is large.

Difficulty Changing Insurance Companies

Homeowners might find it difficult to alter insurance companies after submitting a theft claim. If you reside in an area where theft occurs frequently, this may make it more complex to switch to a new insurance provider. Most firms deny applicants according to their claim history or the place in which the home is located.

Denial of Benefits for Vacant Home

If a home that’s robbed has been unoccupied for a while, the insurance carrier may deny the theft claim. Many companies require that homeowners take out vacancy insurance in case a house will be vacant for an extended period of time. This type of insurance may be costly and isn’t always offered.

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