Short Answer: Yes.
Many real estate investors are surprised to learn that insurance companies don’t just look at the property they’re insuring—they also look at the property owner’s claims history.
If you’ve had claims on other rental properties, it can absolutely affect your ability to obtain insurance, the premium you pay, and even which insurance companies are willing to offer coverage.
How Insurance Companies Evaluate Landlords
When you apply for insurance on a new rental property, insurance companies typically review:
- The property’s claims history
- The owner’s claims history
- Prior insurance cancellations or non-renewals
- Credit-based insurance score (where permitted)
- Property condition and maintenance
- Number and type of prior losses
In other words, if you’ve had multiple claims on other properties you own, underwriters may view you as a higher-risk landlord—even if the new property has never had a claim.
What Is a CLUE Report?
Most insurance companies use a database called the Comprehensive Loss Underwriting Exchange (CLUE).
A CLUE report contains information about prior insurance claims, including:
- Date of loss
- Type of loss
- Amount paid
- Property address
- Policyholder information
When you apply for insurance, many carriers pull your CLUE report to evaluate your loss history.
Which Claims Concern Insurance Companies Most?
Water Damage Claims
Water damage is one of the biggest concerns for insurers today.
Examples include:
- Burst pipes
- Slab leaks
- Water heater failures
- Supply line leaks
- Overflowing toilets
Multiple water claims can significantly impact your eligibility for coverage.
Fire Claims
Large fire losses often result in increased scrutiny from underwriters.
A major fire claim may affect insurance availability for several years.
Liability Claims
Claims involving injuries to tenants or visitors can raise concerns about future liability exposure.
Examples include:
- Slip-and-fall accidents
- Dog bites
- Premises liability lawsuits
Theft and Vandalism Claims
While generally less concerning than water or fire losses, frequent theft claims can still affect underwriting decisions.
Does It Matter If the Claims Were on Another Property?
Yes.
Many insurance companies evaluate the property owner, not just the property.
For example:
You own:
- Rental Property #1 in Anaheim
- Rental Property #2 in Westminster
- Rental Property #3 in Long Beach
If Property #1 had several water damage claims, an insurance company may consider that history when evaluating coverage for Property #3.
Underwriters often view repeated claims as an indicator of future risk.
How Long Do Claims Affect Insurance?
Most insurance companies focus on claims within the last:
- 3 years
- 5 years
- Sometimes up to 7 years
Recent claims generally have a greater impact than older claims.
Can Multiple Claims Lead to a Declination?
Unfortunately, yes.
Many insurance companies may decline an application if they see:
- Multiple water damage claims
- Frequent liability claims
- A recent major fire loss
- Several claims within a short period
This is especially common in today’s challenging California insurance market.
How Landlords Can Improve Insurability
If you own rental properties, consider taking proactive steps to reduce future claims:
Upgrade Older Plumbing
Replacing aging plumbing with PEX or copper can reduce the likelihood of costly water losses.
Replace Aging Roofs
Roof claims are expensive and can lead to non-renewals.
Install Water Leak Detection Devices
Many insurance companies view leak detection systems favorably.
Screen Tenants Carefully
Quality tenants often help reduce liability, vandalism, and maintenance-related claims.
Address Maintenance Issues Early
Small problems often become large insurance claims when ignored.
The Good News
Having prior claims does not necessarily mean you cannot obtain insurance.
Many carriers still offer excellent options for landlords, even if there are prior losses. The key is working with an experienced insurance broker who understands which companies are most competitive for your situation.
At Starwest Insurance Services, we work with multiple admitted and non-admitted carriers to help landlords find coverage solutions throughout California.
Need Help Insuring a Rental Property?
Whether you own a single rental home, condo, duplex, triplex, fourplex, or a larger investment portfolio, we can help review your options and explain how prior claims may affect your insurance.
James C.Q. Banh
Starwest Insurance Services
📞 Office: 714-893-7271
📱 Text: 714-867-7799
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