When frequent claims lead to insurance coverage denial

Votre voiture a une vitre cassée. Il y a une fuite d’eau dans la salle de bain. Il y a eu un accident avec la nouvelle voiture. Il y a eu un incendie dans la cuisine.

All these problems pile up and you feel like you’re really unlucky.

Unable to cover the entire cost of these claims yourself, you file a claim with your insurer. But to make matters worse, your insurer informs you that it no longer wishes to insure you because you have filed too many claims.

Chez AMR, nous recevons tous les jours des appels de clients qui n’arrivent plus à trouver de l’assurance. Heureusement, nous transigeons avec des assureurs hors-normes. Cela nous permet donc de trouver de l’assurance, même au pire des conducteurs!

A high frequency of claims and auto insurance denials

In fact, making several claims in a short period of time is often a reason for insurers to refuse to cover you. They may even decide not to renew your coverage or even terminate your contract.

The nature of the claims and your share of responsibility do not even play a role in their decision. Even if the amounts claimed are not exorbitant, it is the frequency of claims that is taken into account.

At Assurances Multi-Risques, we empathize with such situations, which is why we want to raise awareness about the impact of claims.

What constitutes an excessively high claims frequency for an insurer?

Unfortunately, the definition of an excessively high claims frequency varies from one insurer to another. We are therefore unable to provide you with a limit that should not be exceeded.

And how long between claims?

Once again, it depends. Some insurance companies may go back up to 10 years in your file to assess your claim frequency. However, be aware that other insurers are more flexible.

Problems with insurance claims

First, your insurance company has a duty of care toward its customers, i.e., the people insured by it. In other words, your insurer must manage each premium paid to it properly in order to control its expenses. It is in its interest to be fair and equitable to all its customers. If it considers that your frequent claims are detrimental to its fairness, it may refuse to cover you.

You are probably upset after learning that your insurer refuses to cover you. You may think that they are simply trying to avoid risk and keep your premium. However, risk management must be taken into consideration.

Risk threshold assumed by the insurer

The risk threshold that an insurance company can assume varies depending on its size and priorities. Thanks to technology, primarily advanced statistics, your insurer can assess the risk factors associated with your file. It is also a way to estimate the likelihood of having to pay for another claim.

If your insurer considers the risks too high, they will likely refuse to cover you.

So, when you face bad luck, should you file a claim or not? Sometimes yes, sometimes no. To find out whether your claim is worthwhile or whether it will have negative consequences for your insurance, we advise you to contact your insurance agent or broker for guidance on the right decision to make. Read our article on insurance companies refusing to insure people who have made too many claims.

What are the consequences of making multiple claims?

Please note that a claim will increase your insurance premium, as you will lose your no-claims discount.

For an insurer, filing a claim after a loss is still a relatively simple task. It becomes more complicated when an insured party files several claims within a short period of time. In such a situation, the insurer may take various decisions:

• Increase in your deductible and insurance premium;
• Requirement that you make corrections (for example, if you have been repeatedly burglarized, they may ask you to install an alarm system);
• Reduce or eliminate some of your insurance coverage;
• And in the worst case scenario, non-renewal or cancellation of your auto, home, or business insurance policy.

What can you do to reassure yourself after a non-renewal?

As soon as you are notified of non-renewal by your insurer, find out the reasons as soon as possible. Knowing the cause of this decision will make it easier for you to take corrective action, if possible.

This will enable you to improve your risk management and increase your chances of finding a new insurer offering the best value for money.

If your home has suffered water damage, it is important to make repairs quickly. To avoid problems and protect your money, make sure your home retains its value.

How can you avoid having too many complaints?

Before filing a claim, we strongly advise you to contact your insurance agent or broker. They will be able to assess the situation and advise you whether or not it is in your best interest to file a claim. A good broker will explain how your claim could affect your insurance record.

In addition, avoid filing claims for small amounts! Remember that your claims history is an important factor when renewing your insurance.

This will save you from paying high premiums by insuring yourself in a specialized market with many claims.

Trust an independent insurance broker!

Si vous faites face à un refus de renouvellement d’assurance ou à une résiliation de contrat, pas de panique! Contactez-nous, et l’un de nos courtiers d’assurance indépendants spécialisés dans les refus d’assurance vous dénichera un assureur spécialisé!

This will save you time by avoiding fruitless searches. It will also save you a lot of stress by sparing you a call from your creditor.

And when the time comes, once you are back to a “normal” situation, we can find you an insurer with competitive rates!