Due to the obscenely cold weather the northern latitudes have been experiencing this year, I had a pipe burst in a detached studio on my property overnight. It's a small space; ~200 sq. feet, and my uneducated guess at the damage is about $5000. I'm not sure whether or not something like this is worth an insurance claim (I have a $1000 deductible), because I know that insurance companies can raise rates and take other actions that make it not worth the cost and just doing the repairs out-of-pocket.
I've never filed a homeowner's claim before. I only bought this (my first) house about 5 or 6 years ago. So in researching the whether-or-not-to-claim question on the internet, I read all about the CLUE system (Comprehensive Loss Underwriting Exchange). The CLUE database acts almost like a credit report and contains a list of every claim you've ever filed. Every insurance company that subscribes to the system (all of them) can see your entire claims history. If you file more than one or two claims in a 10-year period, your insurer can raise your rates or cancel your policy (can vary depending on the company and the circumstances).
Now, the thing that give me cause for concern is that you can wind up in this database even if your insurance company never paid a claim. For example:
- If you file a claim and it gets denied.
- If you start the claims process but the estimates don't meet your deductible.
- If you report damages but later decide to pay out-of-pocket for repairs because of adverse impacts it would have on your rates.
I've also read that if you have damages and you discuss it with your agent, they have an obligation to report the incident if they represent a specific company (mine does). This can work out in your favor if, for example, you take a long time to decide what to do; you have a record that you notified your agent promptly as required by your policy. But this also lands you in the CLUE database and could count against you later.
If you get dropped by an insurance company, it can make it very difficult and expensive to get insurance in the future. Therefore, it doesn't seem fair to me that simply exploring the possibility of filing a claim could label you as a "frequent flyer" down the road if nothing you did cost the insurer any money and you've paid your premiums on time.
It seems like the insurance industry has created an atmosphere of fear, uncertainty, and doubt (FUD) surrounding the use of the service you pay for. As it stands now, I'm not even sure if I want to talk to my agent about it because this claim is relatively small, and I don't want it to bite me later on if I have to file a claim for something big.
I know it's a bit premature to be thinking of this, but what rights do I have? I'm in Washington State if that matters (it probably does).