Did Your Home Insurance Go Up After a Claim? Find Out How and Why

Home insurance is a type of insurance that covers your home and personal property from various risks, such as fire, theft, vandalism, storm damage, and more.

A couple losing properties
Did Your Home Insurance Go Up After a Claim?

Home insurance can also provide liability coverage, which protects you if someone gets injured on your property or if you cause damage to someone else’s property.

However, home insurance is not a free pass to file claims whenever you want.

In fact, filing a claim can have a negative impact on your home insurance premium, which is the amount of money you pay for your policy.

Depending on the type, frequency, and severity of the claims you file, your home insurance premium can go up significantly, making it more expensive to insure your home.

How Much Does Home Insurance Go Up After a Claim?

There is no definitive answer to how much your home insurance premium will increase after a claim, as different insurance companies have different methods of calculating rates and applying surcharges.

However, some factors that can affect the amount of increase are:

1.The type of claim

Some claims are considered more risky than others by insurance companies, and therefore result in higher premium increases.

For example, claims related to water damage, theft, or liability are typically more costly and more likely to recur than claims related to fire or hail damage.

According to a study by InsuranceQuotes, the average premium increase for a water damage claim was 18.8%, while the average increase for a fire claim was 10.4%.

2.The amount of the claim

The more money the insurance company has to pay out for your claim, the more likely they are to raise your premium to recoup their losses.

However, this does not mean that you should avoid filing small claims, as they can also add up and affect your premium.

Some insurance companies may even have a threshold for the amount of claims you can file before they increase your rate or drop your coverage.

3.The number of claims

The more claims you file, the more you are seen as a high-risk customer by your insurance company.

Filing multiple claims in a short period of time can make your premium skyrocket, or even cause your insurance company to cancel your policy or refuse to renew it.

According to the same study by InsuranceQuotes, filing a second claim within a year can increase your premium by 20%, while filing a third claim can increase it by 50%.

4.The location of your home

The area where you live can also affect how much your premium will go up after a claim.

Some states have laws that limit or prohibit insurance companies from raising rates or dropping customers based on claims history.

Other states have higher rates of natural disasters, crime, or litigation, which can make insurance companies more cautious and more likely to increase rates after a claim.

For example, the average premium increase for a single claim in Texas was 27.3%, while the average increase in New York was 9.6%.

How to Avoid Home Insurance Premium Increases After a Claim?

While you cannot control all the factors that affect your home insurance premium, there are some steps you can take to minimize the impact of filing a claim on your rate.

How to Avoid Home Insurance Premium Increases After a Claim Infographic
How to Avoid Home Insurance Premium Increases After a Claim?

Here are some tips to avoid home insurance premium increases after a claim:

1.Shop around

If your current insurance company raises your rate or drops your coverage after a claim, you can always look for another provider that offers better rates and more lenient policies.

However, you should be aware that switching insurance companies can also have drawbacks, such as losing discounts, coverage gaps, or lower customer service.

You should also disclose your claims history to any potential new insurer, as they may charge you more or deny you coverage based on your past claims.

2.Raise your deductible

Your deductible is the amount of money you have to pay out of pocket before your insurance company pays for the rest of your claim.

By raising your deductible, you can lower your premium, as you are taking on more of the risk yourself.

However, you should only do this if you can afford to pay the higher deductible in case of a claim, and if you are not likely to file frequent or small claims that would not exceed your deductible anyway.

3.Maintain your home

One of the best ways to avoid filing claims and increasing your premium is to prevent damage from happening in the first place.

You should regularly inspect and maintain your home, and fix any issues or hazards that could lead to bigger problems or injuries.

For example, you should clean your gutters, repair your roof, install smoke detectors, secure your windows and doors, and trim your trees.

You should also invest in preventive measures, such as installing a security system, a sump pump, or a water leak detector, to reduce the risk of theft, water damage, or other losses.

4.File claims wisely

Sometimes, filing a claim is unavoidable, especially if the damage is severe or involves liability.

However, you should always weigh the pros and cons of filing a claim, and consider the long-term effects on your premium.

You should also check your policy and understand what is covered and what is not, and how much your deductible and coverage limits are.

You should only file a claim if the amount of the damage exceeds your deductible by a significant margin, and if you are not likely to file another claim in the near future.

FAQs

How long does a claim stay on your home insurance record?**

A claim typically stays on your home insurance record for three to five years, depending on your insurance company and state laws.

However, some claims, such as liability claims or dog bite claims, can stay on your record for longer, as they indicate a higher risk of future claims.

How can I find out how much my premium will go up after a claim?

The best way to find out how much your premium will go up after a claim is to contact your insurance agent or company and ask them for an estimate.

They should be able to tell you how much your rate will increase, and for how long.

Can I get a discount on my home insurance premium after a claim?

Yes, you may be able to get a discount on your home insurance premium after a claim, depending on your insurance company and the type of claim.

Some insurance companies offer discounts for customers who file claims for certain types of losses, such as wind or hail damage, as they indicate that the customer has taken steps to mitigate the damage or improve the home.

Other insurance companies offer discounts for customers who have not filed any claims for a certain period of time, such as three or five years, as they indicate that the customer is a low-risk and loyal customer.

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