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I’ve had a home-owner’s and auto policy with Allstate for the last 4 years. The increase was labeled a claim surcharge. The surcharge is almost 500 dollars
I paid the deductible at the time the claim was filed. Now I will be charged this surcharge for the next 3 years…if I do not have another claim.
This was my first HOMEOWNERS claim in 4 years. It was to repair a leaking pipe underneath my townhouse slab.
The water claim was over a little over $3k. Thanks for all the advice. I will be searching for another carrier immediately.
This is about Auto Insurance Information.
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6 Responses to I filed a claim with my insurance company and am now being charged a claim surcharge. Is this legal?
Roger M
February 8th, 2010 at 5:08 am
almost all the insurance companies do it anytime you file a claim
It sucks but is legal
Christina
February 8th, 2010 at 6:00 am
it is part of your deductable. You should see what types of deductable’s they offer. sometimes the deductable could be $1,000. Speak to your agent about what happened to confirmed you were properly charged.
mbrcatz
February 8th, 2010 at 6:44 am
Yes. It’s perfectly legal.
Adam
February 8th, 2010 at 7:15 am
This is not part of the deductible, this is a rate increase because you filed a claim. It’s a frustrating (but standard) practice of insurance companies to raise you rates after you filed a claim. Oddly enough, many insurance companies are wont to drop you after a single home insurance claim.
At this point, you should probably compare rates from a few different companies (fully disclosing the claim with Allstate, of course). Five hundred dollars a year on top of what you’re already paying is pretty steep. There’s probably a company out there that will give you the same coverage for less.
RichardFitzentite
February 8th, 2010 at 7:56 am
Is this for homeowner insurance? If so a $500.00 premium for insurance is pretty spendy. Not to mention a surcharge of $500.00 dollars. So what are you paying annually? $1000 +? Usually homeowner insurance doesn’t increase after a claim. You will simply be dropped from the company for too many claims or a claim that could have been prevented (candle catches the curtain on fire…). By the way what was the claim you filed?
Was it for auto insurance? The surcharge on the auto insurance would make more sense. Your auto insurance rate is based on factors that determine how likely you are to get in an accident in the future (tickets, accidents, age, marital status). If you had an accident, and I assume you did because you turned in a claim, you are rated higher because of that accident. You don’t really hear the term “surcharge” to often. That is a confusing term, it implies that your rate has stayed the same but you will have to pay an “extra” charge. When in reality, the rates for all of the coverages you have chosen have gone up. If you dropped collision, for example, I doubt very much you would still have to pay a “surcharge” of $500.
Please explain more the details of the claim, and how much you were paying before the claim and what coverages.
toby
February 8th, 2010 at 8:32 am
This is why its a good idea to get insurance through an independent agent, or at least know a good one. Shop your policy (disclosing the water claim). It makes no sense to maintain loyalty forever to a single insurer, you can already see what happens to “loyal” clients.
Water claims are looked at more seriously than others. You may find that there are carriers who will not quote your policy due to the prior claim. I don’t know what the slab leak repair bill was, but lets look at what its costing you: $500 surchargex3yrs + deductible (1% of 150K? = $1500)= $3000. Part of an agent’s job is to help his client determine whether a claim is worth filing or not. If this repair cost was more than 3K, I’d say you got a pretty good deal. If not, then you shouldn’t have filed it.
Insurance is not a “debit card” system. Its designed for serious losses that would put you in a financial world of hurt. The most humorous thing I see is that the folks who complain the loudest about insurance rates (ie maybe they’re paying 6K/yr for auto insurance) are the ones who have caused $50K+ worth of damages in the last few years! I’d say they more than got their money’s worth!