Although people pay for manufactured homeowner’s insurance to protect themselves from financial losses should something happen to their homes, filing claims can sometimes result in a higher premium or difficulties obtaining or maintaining coverage in the future. That being said, deciding whether or not it makes sense to file a claim is critically important.
Since filing a claim isn’t always in the best interest of the homeowner, we’ve gathered below a few basic facts that manufactured homeowners should consider before filing a claim under their policies.
Considering the Deductible
When filing a claim for manufactured homeowner’s insurance, many people fail to consider their deductibles. In simple terms, the deductible is the amount of money you need to pay out before the insurance benefits kick in. When an insurance company pays a claim, it is for the amount of the damage minus the deductible.
If your deductible is $500 and the repairs on your home total $3,000, for example, you’ll have to pay the $500 deductible, which means that your insurer will need to cover the remaining $2,500. If the cost of repairs is $500 or less, you’ll basically end up covering the entire amount. In that case, filing a claim with your insurer won’t have any favorable cost benefit.
Filing Multiple Small Claims
Recently, manufactured homeowner’s insurance providers have expressed concerns about the number of claims some policyholders file in a relatively short time frame. Typically, the greater the number of claims filed within a specific time frame, the greater the likelihood of a rate increase.
Because your insurer will look at your claim history when setting your new rate, he may correlate a high number of claims that have occurred close in time to a higher likelihood of filing more claims in the future. In the world of insurance, riskier customers usually get higher premiums. But even worse than getting a higher premium is receiving a non-renewal notice from your insurer. This could happen since multiple claims filed over a short period of time could be considered a valid reason for non-renewal. On the other hand, if you aren’t at fault, or if you couldn’t have taken any action to prevent damages or injuries, your premium should remain unchanged.
In addition to your claim history, a few other factors that may affect your manufactured homeowner’s insurance rate include your home’s age and overall condition, the amount of coverage you opt for, and whether you also choose additional insurance, like disaster insurance.
Furthermore, any additions you build, such as garages, decks, or patios, and/or updates or renovation you make can increase the value of your manufactured home, which will translate into a higher replacement cost. Considering that most manufactured homeowners insurance plans offer replacement cost coverage in order to ensure that the homeowner’s interest in the home is covered completely, a higher replacement cost may contribute to an increase in your insurance premium. Remember, however, that while some upgrades may lead to a higher premium amount, others may allow you to lower your insurance renewal rate.
Considering the Level of Coverage
Before filing a claim, it’s important that you review the applicable coverage and deductible, assess the amount of loss, and take into account how the claim will affect your future insurance rate. This is critical because filing multiple claims for small, avoidable problems, like water damage due to bathtub overflow or a leaking pipe under the kitchen sink, can lead to a higher premium at the next renewal.
Considering all these aspects, the decision to file a claim should be made according to individual circumstances and based on the type of coverage, nature of the claim, and the terms and conditions of your manufactured homeowner’s insurance policy. However, if your home suffers major damage, the first thing you want to do is promptly file a claim with your insurer.
Additionally, manufactured homeowners should be aware of the things they can do in order to avoid having their claims denied. These are:
- making sure they understand their responsibilities as homeowners;
- obtaining adequate coverage for their exposure and having a good understanding of all the coverages and exclusions stipulated in their policies;
- adding flood insurance to their plans, where required
- maintaining a written inventory of their possessions, including pictures, BEFORE a loss occurs;
- maintaining detailed records of any repairs done on their property.
If your home has sustained some damage due to a natural disaster, accident, theft, or any other unfortunate event, and you’re unsure whether or not you should file a claim with your insurer, the best thing to do is to reach out to your insurance agent.
If you’re looking for comprehensive manufactured homeowner’s insurance coverage from a reliable insurer, you can get a quick premium estimate by simply filling out our online form or contacting our friendly insurance specialists at 1-800-522-2013, x1209.