Claims that boost your insurance rates

Dog bites. Sorry, Rover, but dog bites are the largest single cause of home policy claims, according to Robert P. Hartwig, president and chief economist of the Insurance Information Institute.

Many insurance companies keep a list of dog breeds most likely to attack, based on Centers for Disease Control and Prevention statistics. If the homeowner owns that breed, it may be difficult to obtain insurance.

A single attack is often likely to result in higher premiums. However, homeowners may be able to keep their rates from escalating by remedying the situation to the insurance company's satisfaction.

This may involve getting rid of the dog, or taking the dog to an animal psychologist or trainer. Sometimes, the homeowner's rates will then depend upon passing a probationary period, such as 6 months without an attack.

Water damage. Water damage tends to set off a barrage of red lights for insurers, largely because of the costs of eliminating mold. The biggest controversy over CLUE reports has been over water damage and its effect on real estate sales.

If an insurance company finds a history of mold or water damage, the new buyer may have problems getting home insurance, says Bankrate columnist Liz Weston, the author of "Your Credit Score" and "Deal With Your Debt."

"Be careful with a water claim," she says. "Insurance companies aren't as paranoid as they used to be, but many have begun to exclude mold coverage from their policies."

Plumbing problems that cause damage inside a property also can be red flags for insurance companies, particularly if the repairs, or lack thereof, result in another, similar claim.

You might be better solving the water-damage issues yourself, especially if the damage is minor and involves broken pipes or leaks in window wells, walls and seams.

Slip-and-fall claims. A slip-and-fall injury is a generic term used to describe an injury that happens when someone trips, slips or falls as a result of a hazardous or dangerous condition on someone's property.

Slip-and-fall injuries, according to the National Safety Council, are the single largest cause of emergency room visits. If a person is hurt on your property and files a claim with an insurance company, your rates may rise.

Auto claims are trickier

Compared with home insurance, it is much harder to pinpoint which types of claims may cause your auto insurance rates to spike.

For the consumer, automobile insurance is more volatile and very dependent on factors including your driving record, age and number of claims, Weston says.

Other rate-hike or policy cancellation triggers vary from state to state and company to company. However, factors that may be considered include whether you were driving while drunk, whether injuries incurred, and the severity and type of accident.

Some companies have a policy to forgive a first accident, but such rules are not ironclad.

To keep your premiums from increasing, it's usually a good idea to avoid filing an auto claim if you have accidents or damage totaling $1,000 or less. If you decide to take this approach, make sure to raise your deductible to $1,000, which can lower your premiums.

Paying out of pocket for damage covered by insurance is distasteful to many people. However, a series of small claims can result in increased premiums and possible loss of coverage.

It gets back to the notion of what insurance is all about: bailing you out from a large disaster, rather than the small things that annoy rather than harm.

Avoiding minor auto claims

"There are folks who are so strapped for cash and living paycheck-to-paycheck that even a minor fender-bender would be a catastrophe, and in that case they might want to keep a low deductible," Weston says. "But for most of us, you'd rather have money in the bank and cover the thousand-bucks deductible yourself."

In addition, if you back your car into a telephone pole or another car and nobody is hurt, it might be better to just pay for the damage yourself.

"My feeling is that if you have a little accident that's under the deductible, yes, your insurance company wants you to report it," Weston says. "But you should at least consider just handling it out-of-pocket if no one was injured and no police report was filed."

However, a word of caution: If you cause an accident involving other vehicles, you should report it to your insurance company, even if the damage to your own vehicle is negligible. The other party may, legitimately or not, file a claim for damages or injury. Having your version of the accident on record will go a long way toward having your insurance company on your side.

Also, many states require accident reports to be filed by the police. If that's the case where you live, your insurer will be sure to find out whether you report it to them or not.


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