I have home owners insurance and 2 years ago I had a pipe leak and needed a repair. I couldn’t get a hold of the local office so I submitted a claim online. Then State Farm called me and explained that the repair would cost less than the deductible so that I would be better off not using the insurance.
Now 2 years later I’m buying a new house and called for a quote on insurance and they said we’re uninsurable because we tried to use the coverage once even though we did not use it?? They said it’s a “loss”. And they said they have to reach out to underwriting to see if the can make an exception.
Is this normal? I am so confused.
We’ve been home owners for 10 years and never made a claim before.
State Farm says I’m uninsurable because 2 years ago I submitted a claim and then decided to pay for it myself ?
byu/pauses-then-says inInsurance
Posted by pauses-then-says
7 Comments
Insurance companies arent obligated to insure you. Find an independent broker who can shop for you and locate a company who is happy to take your business.
Completely normal. Every insurance carrier has their own underwriting guidelines and you dont fit theirs. There are a thousand other insurance companies out there.
Once you file a claim, it will remain on your record for 3-5 years, regardless of how much (if anything) was paid out. People who file one claim are statistically more likely to file more claims. Especially small claims. Don’t ever file a claim that is below (or even near) your deductible.
You have made a claim before. That is why you are being declined now.
In many places insurance companies aren’t really looking to expand their book of business right now. They are setting strict underwriting guidelines to reduce their exposure as much as possible. If your 0$ claim means you do not currently meet their guidelines then there isn’t much for you to do besides shop around. Someone will insure it.
Yes, this is normal. SF isn’t saying you’re uninsurable, they’re saying they don’t want to insure you. There are plenty of other carriers out there – find yourself a decent local broker or independent agent and have them shop around for you.
Lots of people have to learn the hard way that claims (and especially HO claims) should really be reserved for big losses. Insurance companies (obviously) don’t want to pay claims if they don’t have to, and they have a strong preference for policyholders that never file claims. They understand that sometimes unavoidable things happen (trees falling on roofs, lightning strikes, big storms, etc.), and those things can lead to big losses. And that’s what insurance is for.
A small pipe leak that costs a few hundred to repair any damage caused (or even a few thousand) is not what insurance is “supposed” to be used for. And filing a claim for such a de minimum loss sends a strong signal that this is the sort of policyholder that intends to utilize insurance for relatively minor things. This is simply not the sort of policyholder carriers wish to insure, and when the market favors carriers, they stop insuring them.
Every claim is a claim. Full stop. Zero payout is still a claim. Withdrawn without payment is still a claim. Fully subrogated is still a claim. And SF really, really doesn’t like policyholders who make claims.
In the future, it’s best to get a good understanding of exactly what you’re dealing with when something happens before bringing a claim. You’ll find someone to offer a policy here. Good luck.
This is a blessing in disguise for you.
Take it as a sign and move on.
State farm is facing multiple lawsuits including from a former judge and the company is apparently under investigation for fraud related to the home and car insurance divisions.
Reason being for denying insurance claims or paying out so small that homeowners had to finance repairs themselves.
Do you really want to be insured by a company that may not pay a legitimate claim ??
And do you really want to support a company engaged in shenanigans ?
Research and find a new home insurance company that is best for customer service, customer satisfacation and claims handling and honorable.
Easy internet search will find you top rated insurance companies.
I think a few things are happening.
You filed a previous claim, even if it didn’t pay out it stays on your record.
You are buying a home in NJ.
You are buying a home with a pool.
Those 3 combined may turn off insurers.
Yep. I had concrete roof damage from a microburst just a few months after buying a new build house. Filed a claim. Carrier sent an adjuster who determined cost to repair was less than deductible. Then within just a couple weeks, before I had the opportunity to repair, another microburst blew some tiles off the same section of upper roof and they fell onto the lower roof, causing new damage. Having never filed a homeowners insurance claim before, I filed a second time assuming that both incidents would now be covered because the total cost to repair the damage would now exceed my deductible.
I was wrong. The carrier (of course) considered them two separate incidents and two separate claims, neither of which met the deductible.
And so I had two claims, both with zero payout, and my smart self decided I was fed up with that carrier so I shopped my policy. I couldn’t even get quotes because new carriers considered me uninsurable.
Edit: since the homebuilder still had model homes, a sales office and was actively building in the community, I was able to harangue the builder into giving me enough new roof tiles for me to just hire a handyman to replace them. Ultimately I think my out of pocket was like $300 for a handyman to come out and install the tiles. Took him like 30 minutes.