Stockham Law Group Logo

Practical Advice.
Experienced Representation.

Can an insurance company raise a deductible during a claim?

On Behalf of | Feb 9, 2024 | Property Damage

Florida homeowners often invest substantially in insurance coverage. A homeowner’s insurance policy can protect them from liability and may also provide key coverage after a storm causes damage.

People often set their policy terms when they hope they never need coverage. The focus might be on keeping costs as low as possible, as their mortgage company may require proof of coverage. Sometimes, people commit to higher policy deductibles and lower coverage amounts as a way to reduce their premiums. Other times, people base the deductibles they agree to on how much money they have set aside for an emergency.

Deductibles are often $500, $1,000 or more. People have to pay those funds out of pocket before the insurance company helps cover the cost of their repairs. The idea of having that amount surge during a claim is a stressful one. Can a company increase someone’s deductible because of a large claim?

The current policy terms are what apply during a claim

The coverage in effect at the time of an incident is what determines someone’s personal financial responsibilities and the policy limits. The contract someone negotiates with an insurance company is an enforceable agreement that both parties should enter into in good faith.

In other words, both parties should uphold the terms of that original agreement to the best of their abilities. The insurance company cannot retroactively alter the terms set in a homeowner’s insurance policy. Requiring that someone pay a higher deductible could be one form of bad faith insurance.

Attempts by an insurance company to avoid responsibility to a client, including efforts to alter coverage or deny coverage without cause, could be a form of bad faith insurance. It is sometimes necessary to take legal action to secure the right outcome. While the company could increase someone’s premiums later or charge the same amount for less coverage after a major claim, the introduction of those new terms should be part of policy renewal discussions.

Policyholders frustrated by an insurance professional seemingly moving the goalposts during their claim might need legal guidance from someone who is familiar with Florida’s insurance rules. A lawyer can also explain the legal language included in policy documents. Ultimately, understanding the rules that limit insurance company actions may benefit those negotiating or preparing to file a property insurance claim.