• Frequent claims = refusal to insure?

    10 April 2019Christopher Johnson

    Cracked windshield, water leak in the bathroom, fender bender with the car, and cooking fire in the kitchen – luck has definitely not been on your side lately, and you are beginning to think that you were born under an inauspicious star! Unable to cover the cost of all of those strokes of bad luck, you have made claims to your insurer. Now, to top things off, your insurer has just notified you that he can no longer insure you because you have made too many claims! Indeed, if you have made several claims in a short period of time, your insurer can decide to deny you coverage, to not renew your contract or even to cancel your insurance altogether. That can happen whatever the type of claim or the degree of responsibility you have in the claims. It is the frequency of claims that is taken into account here, not their amount.

    Assurances Multi-Risques brokers are very sympathetic towards people in your situation, and would like to help you to better understand the claims dynamic and the insurers’ point of view on frequent claims.

     

    Why is your insurer refusing to renew your contract after several claims?

    In shock after learning that your insurer no longer wants to insure you, you probably thought that he was only in it for the money and that he didn’t care to serve his clients. Things are, however, not as simple as they seem! First of all, insurance companies have a due diligence obligation towards their clients. That means that insurers have to measure up each premium received to the amount of claims paid out in order to be fair and equitable toward its clientele. Therefore, if your insurer judges that your frequent claims compromise his equity towards his other clients, he is allowed to deny you coverage.

    Moreover, the amount of risk an insurance company can take on depends on its size and on its corporate values. Since new technology allows companies to access a lot of data in order to evaluate risk, they can easily determine the probabilities of having to pay yet another claim in your name. If the risk is deemed too important, chances are that your insurer will refuse to cover you.

    So, if you’ve had a stroke of back luck, should you make a claim or not? The answer is in some cases yes, in others no! To determine if your claim is worthwhile or if it might negatively impact your insurance record, we suggest that you contact your insurance agent or broker and discuss the matter with him or her.

     

    How to get new insurance coverage after a refusal to insure?

    As soon as your insurer informs you that he is not renewing your insurance coverage, we encourage you to ask him to provide you with the reasons behind his decision. This will allow you to correct the situation if you can. Knowing why this has happened will also help you to better manage your risk, and to find another insurer who will offer you the best possible quality price ratio.

    If, for example, you have just dealt with water damage in your home, we encourage you to take corrective measures as soon as possible in order to avoid having problems obtaining a new insurance contract, and to protect your home’s value.

    To sum things up, if your insurer issues a refusal to insure notice, don’t panic! Contact one of our independent insurance brokers who specializes in such cases. Our broker will be able to find a specialized insurer willing to cover you until your situation gets back to normal. By doing this, you will not only save time by avoiding unsuccessful calls, but also will avoid getting a call from your creditor asking you why you are no longer insured. Once your life gets back on track, you will again be able to find an insurer willing to insure you at a competitive rate!