One of the most common misconceptions we hear around insurance is that all claims are created equal. As insurance companies have gotten more sophisticated with their pricing we are seeing that certain insurance claims lead to bigger premium increases than other claims.
As an independent agency that sees claims with over 20 carriers, we want to help you understand:
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Which claims tend to cause issues
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Why they’re viewed differently
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And how to prepare and avoid unnecessary headaches
Because the goal isn’t just getting good coverage—it’s keeping your options open long-term so you can secure the lowest premium.
1. “Mysterious Disappearance” Claims
These are claims where a piece of jewelry or high value item goes missing. Maybe you’re washing dishes and the ring falls down the drain; or maybe you accidentally throw a ring away after removing it while cooking – not that I would have any personal experience with this!
If a claim is filed for this example it falls under “Mysterious Disappearance” claim- as long as you had the item properly scheduled on the jewelry policy. Note: A standard homeowners insurance policy does not automatically cover losing an item and most policies cap jewelry claims at $2,000 unless the policy is endorsed or the items are scheduled.
Why this raises concern:
These claims are especially impactful on your premiums because the insurance company has no way to know if the claim is fraudulent… or maybe it indicates a person isn’t as careful and therefore a higher risk.
These claims receive more scrutiny and can stay on your record for 3-5 years, impacting underwriting eligibility.
Options:
For individuals with large jewelry (or other valuable article) collections, we will often consider separate jewelry-specific insurance companies that don’t impact your home insurance premiums after a jewelry loss.
2. Personal Liability Claims (Injuries or Lawsuits)
These are some of the most financially severe claims.
Examples we’ve seen in Alabama:
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Guest injuries: delivery driver trips on a cracked sidewalk at your house, someone falls off a back deck during a party; kids are injured off a trampoline, pool injuries
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Dog bites (see our article on what to know about canine liability)
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2nd Home Related: Accidental drownings, ATV or other accidents at a hunting camp,
Why this raises concern:
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Liability claims can be unpredictable and expensive
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One claim can significantly impact future underwriting and it might indicate a riskier profile
Even a single incident can increase premiums for years.
3. Water Damage Claims
Water claims are one of the most common—and one of the most scrutinized claim examples because homeowners that have a water claim are 2x as likely to have another water claim.
We see these claims a lot in Alabama where many people have finished basements.
Examples:
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Leaking or bursting pipes
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Overflowing toilets
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Appliance failures
Note: There are several types of water claims that aren’t automatically included on a homeowners insurance policy.
Why this raises concern:
Water claims can often be indicative of a home that needs repairs or maintenance. Maybe it’s an old home and the pipes are reaching the end of their expected life expectancy. Insurers worry about repeat losses as well as hidden damage such as rotting of wood or mold.
Options:
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Install water shutoff devices (and receive significant credits!)
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Install leak detection devices
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Replace aging plumbing components proactively
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Address small leaks immediately
4. $0 Claims
This is a claim that’s opened, but the insurance company paid nothing on the claim. Even if the insurance company denies the claim or pays nothing on the claim, it still shows up on your CLUE report as a $0 claim. These claims still impact your premium and if you have a couple of them it can dramatically impact your premium, and your ability to get reasonably priced insurance.
This could include claims that are beneath your deductible which is more common now that many roofs have higher deductibles such as a % basis for Wind and Hail.
Examples:
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Most common: Roof claim denied- some carriers have ‘cosmetic damage’ exclusions which cuts down on the number of hail claims they’ll pay out on.
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Damaged siding and insured doesn’t have proper endorsement.
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Water damage is deemed to be slow leaking and/or present for long period and claim is denied.
Why this raises concern:
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Insurers may view these as a risk indicator tied to behavior or the condition of the property.
5. Theft Claims
Theft is typically covered—but it still creates underwriting concerns. Insurers may view these claims as a risk indicator tied to location or behavior. Questions can arise around security measures or prevention. Maybe you left a door unlocked while on vacation or maybe you forgot to pay for your security systems monitoring service.
How Can You Know Whether to File a Claim or Not?
Insurance companies aren’t just evaluating the claim you’re submitting—they’re evaluating future risk. Because of this it’s important to know when to file a claim.
This is where it’s important to have a proactive insurance agent that can guide you through the process and advise you how to file a claim.
Important: If you’re insured with a captive insurance carrier, be EXTRA careful asking your agent for advice because they will often open a claim whether you want them to or not.
How Does Allison Insurance Help Our Clients
At Allison Insurance we work with our clients to advise them on when it makes sense to file a claim, and to guide them through the claims process. Getting a claim covered starts with selecting the right insurance carrier and having the correct insurance coverages for your situation.
Because we work with over 20 insurance companies we have choices- including choices for individuals that have had claims! We work to understand how each insurance company operates and how to tailor insurance policies to each individual.
Call or Email us if you’d like to have us look at your personal insurance!
205-738-7444About the Author:
Scott Nesbitt is the Owner of Allison Insurance where he and his team advise homeowners across Alabama on home, auto, and umbrella insurance. Scott’s focus is on supporting lenders, real estate professionals, and financial advisors to provide their clients an exceptional insurance experience. He holds both the Certified Insurance Counselor (CIC) and Certified Risk Manager (CRM) designations and has helped insure thousands of homes throughout the state.
Allison Insurance has over 2,500 clients across Alabama, Tennessee and Georgia. The Allison Insurance team has over 125 years cumulative experience in advising individuals and businesses in their insurance decisions!
