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Can an insurance company increase your deductible after a claim?

On Behalf of | Aug 17, 2021 | Residential Homeowner's Insurance Litigation

Homeowners in Florida may carry multiple kinds of insurance. A basic property policy protects you from premises liability claims if someone falls down your stairs or if your dog bites somebody. You may need additional coverage for flooding or hurricane damage.

Hopefully, you will never need to make a claim against your policy due to a flood or serious storm, and if you do, your insurance company will do its best to handle the claim appropriately. Unfortunately, some property owners face bad faith insurance practices that violate state law and might impact their financial circumstances for years to come.

Trying to pass on more financial responsibility to the policyholder is a common practice by insurance companies facing expensive claims. They might try to limit what coverage they provide or increase the responsibility of the policyholder. Can your insurance company increase your deductible when you make a claim?

Insurance costs often increase after a significant claim

Numerous factors affect exactly what you pay for homeowners insurance. The size and location of your home affect your premium. So does your claim history.

When you first insure your home, you will not have had to make a big claim against a homeowner’s policy in the past, which can mean you have a better rate than someone who has had major property damage claims in the past.

After your insurance company processes and pays a claim, they could notify you about changes in your coverage. They might increase your premium or your deductible for future claims. However, they should not try to retroactively change the deductible that applies to your current claim.

Altering coverage to limit losses is a bad faith insurance practice

It is perfectly reasonable for insurance companies to adjust what they charge someone based on the risk that that policyholder represents. It is another thing entirely to try to reduce the coverage someone already has or alter the terms of their policy because they bring a claim against it.

If your insurance company has tried underhanded tactics to avoid paying what they should on your claim, you may need to prepare to bring a bad faith insurance claim against them to get the coverage that your policy provides.

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