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How do I research previous home insurance claims on a house?

Home Insurance ClaimIf you’ve decided to purchase a home then you may want to research previous home insurance claims to make sure that your policy is going to be reasonable (and affordable) before you buy.

This is because your insurance company is going to look at those previous claims to determine just how much your homeowners insurance premium is going to be.

If this seems surprising, it shouldn’t be, after all, when you put a deposit down for your electricity, the electric company looks at the former owner’s (or tenant’s) power usage to estimate your use.

In addition, when you purchase auto insurance, the insurance company runs a VIN check to see how many incidents has occurred with the vehicle to determine whether or not your rates need adjusted.

When it comes to homeowners insurance, it is relevant to the insurer whether or not the previous homeowner has had three break-ins, flooding in the basement due to a crack in the foundation and so on. This will certainly affect your rates as well. Read on to learn more and then enter your zip above to find and compare many different insurance quotes!

How to Find Previous Home Insurance Claims on a House

Unfortunately, there is no way that you can research previous home insurance claims on a house that you don’t own. While there are two national databases that contain loss history reports, they aren’t available to you unless they are about you. These databases are called the Comprehensive Loss Underwriting Exchange (CLUE) and the Automated Property Loss Underwriting System (A-PLUS).

You may be wondering what these databases are for if not for public use. Well, they are for insurance companies; they are the ones that can request a list of claims on a house. This doesn’t mean, however, that you can go and ask your agent to run a list of claims on a house you are interested in buying; that is against the law. Only the actual homeowner can make that request.

So, where does that leave you?

If you are interested in purchasing a home, you can tell the homeowner that you want to see a previous claims list before you buy. They can request the list from their insurance agent (there may be a small fee) and then provide it to you.

You should make it clear that you won’t purchase the home without seeing the list; if the homeowner won’t provide it, then you might want to reconsider the purchase, they may have something to hide.

If a homeowner has had too many claims on their home and you come along and purchase it without requesting a previous claims report, you may find that the home you are buying is uninsurable. Too many claims on a home, especially if there is a lot of theft or things like flooding, makes the home high-risk and insurance companies want to avoid risk. It is very important that you know what you are getting, in this respect, before you buy.

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Full Disclosure from the Homeowner May Not be Enough

Many people assume that the homeowner is going to tell them about every possible problem that has ever occurred with the house since it is the law; and they should. The problem is, they might not even know what is on their claims report. In most states it is common practice for an insurance company to open a claim for any inquiry from a homeowner, even if they are simply calling to see if something is worth putting a claim in for.

An example of this might be an overflowing toilet. The toilet overflows in the upstairs bathroom and the homeowner notices water dripping from the ceiling downstairs. He fixes the toilet and then calls the insurance company to see if he needs to take any other steps. A claim is opened, even if no action is taken (the claim is marked as no money having been paid, but it is still considered a claim). The homeowner makes the necessary repairs out of pocket because it will only cost $200 and his deductable is $500. Should he mention this to you? Most won’t because it is a minor common problem that is easily forgotten. In the meantime, the insurance company has marked it as a claim, a legal practice in every state.

Imagine that during the same year a flash flood comes through and the homeowner files a real claim for losses to his home (repairs, replacement of furniture and so on). Suddenly, the homeowner has more than one claim on his record. His rates go up, but he assumes it’s because he made this rather large claim due to the flash flood and doesn’t question the increase. You come along and buy the house and the insurance company considers both of those claims when determining your premiums.

Your Past Claims Count Too

Something else that you need to understand is that your past claims are going to make a difference on the cost of your policy as well, even if your claims were due to living in a high crime area where you were robbed. All the insurance company is going to see is that you made a claim and that it cost the company money.

Before you move, you need to request your own claims history report. You want to ensure that the report is accurate. In addition, some insurance companies will make adjustments for extenuating circumstances (such as living in a high crime area and then moving to a safer area) if you take the time to make an appeal regarding your rates. While you may not get a change to your premiums if you request an appeal, if you don’t try, then you defiantly won’t get the reduction that you want.

There are time limits to how long a past claim will affect your rates. While these time limits can vary from company to company, most will not consider any claims that are more than five years old when determining your premiums. This is good news for two reasons. First of all, if the previous claims are more than five years old, they won’t affect your rates. Secondly, even if they are less than five years old, they won’t affect your rates for ever, eventually you will see a decrease in your premiums as long as you aren’t making additional claims in the meantime.

Find the Cheapest Home Insurance Rates

Once you have ensured that the house you want to buy doesn’t have dozens of claims on it and is worth buying, it is time for you to consider your own homeowners insurance.

Like anyone, you probably want to get the best rate possible to keep your costs down. Ask for discounts and compare rates among different home insurers before making a choice.

Use our free online rate quote tool that lets you compare many options in order to get a great rate and the coverage you need for your new home. Enter your zip to start now!

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