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Can a homeowner’s insurance company change your deductible?

On Behalf of | Oct 7, 2022 | Property Damage

Homeowner’s insurance companies frequently suffer major losses when big storms hit Florida, as Hurricane Ian recently did. The companies have to brace themselves both in terms of financial resources and staffing schedules to accommodate the likely influx of claims that will occur after a hurricane makes landfall.

While the average homeowner’s policy does not protect against flood damage, it will cover wind damage, including water damage caused by wind-driven rain. Those who have had windows blown out of their homes, roofs torn off of their houses or water damage caused by rain blown at high speeds across their property may need to file sizable homeowner’s insurance claims.

Can the company that wrote your policy increase your deductible because of your claim?

Insurance companies cannot change the terms when the policy is active

Homeowners typically purchase insurance that lasts for a year and will then have to renew their coverage the next year. The terms that you agreed upon at the time of your renewal are the terms that apply to any claim you make before renewing the policy again.

If you currently have a $2,000 deductible on your policy and it is not set to renew until next April, your insurance company cannot change your deductible to $5,000 for a claim related to storm damage that just occurred. The insurance provider will need to honor the terms of the policy according to the paperwork you signed when you renewed.

However, large claims often mean that premiums will increase in the future or that deductibles will. When it is time for you to renew your policy, the insurance company can consider the size of any claims made when determining how much to charge you or what other adjustments to make to your current coverage.

Policyholders have rights when insurance companies break the rules

If your insurance company has refused to cover damage that clearly falls under the scope of your policy, has delayed payments after approving a claim weeks ago or has tried to trick you, possibly by claiming your deductible went up, you may need to take legal action.

Those who pursue bad faith insurance claims against companies that try to manipulate consumers can both protect themselves and deter the companies from continuing such inappropriate practices in the future. Understanding the rules that govern homeowner’s insurance claims can help you if you need coverage.