People purchasing insurance coverage generally select coverage based on their concerns. Some carry the minimum amount of protection required by the law or their mortgage lenders. Others go beyond the minimum to enhance their protection in case of damage to the home where they live or an incident that leaves another person injured.
Most people with homeowner’s insurance policies go years without ever filing a claim. When they do file claims, they are often for relatively large losses. They may have to pay a certain amount of the repair costs up front to meet their policy deductible first. Deductibles of $500, $1,000 or even more are common.
Can an insurance company respond to a sizable claim by increasing the policyholder’s deductible?
There’s only one time to alter policy terms
Filing claims can have an impact on future policy costs. Frequently, insurance companies charge more for coverage when policyholders have recent large claims on record. However, those changes are not retroactive. They only apply to future renewals of the policy.
The only time when insurance providers can increase deductibles and otherwise modify policy terms is during the renewal negotiations for the policy. Insurance companies cannot increase a policy’s deductible in the middle of the policy’s term. The deductible agreed upon when negotiating the policy originally is what applies when making a claim.
Policyholders dealing with high-value claims or misrepresentations of their coverage may need support to understand and assert their rights. Partnering with an attorney can help those facing complicated insurance claims and insurance conflicts pursue the coverage they paid for and deserve.
