What is the Paid Loss Surcharge, and how could this impact the cost of my premium?

Answer:

Homeowners insurance is designed to cover one’s property in an unforeseen loss. On average, most policyholders either don’t submit any claims or only submit weather or glass claims over a three year period. However, the remaining claims are substantial enough to potentially cause everyone’s premiums to rise. In order to prevent this, the vast majority of insurance companies have a “Paid Loss Surcharge” that is designed to isolate the rising cost of non-weather or glass related claims. Under this program, a policyholder’s first claim is not surcharged, but any subsequent claim(s) may cause the homeowner’s premium to rise significantly.