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


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.