Will Making a Claim Cause my Premiums to Go Up?

The purpose of having a homeowners policy is to give you financial peace of mind when accidents and damages occur. A mortgage company is also likely to require that a potential homeowner takes out a reasonable policy before approving any loan. Since such an insurance policy is meant to protect you when you need to pay for accidents and repairs, it can be disheartening to know that your premium is at risk of increasing if you are to make a claim. However, every insurance provider has specific procedures regarding how to handle rates, and this does not mean that premiums go up with every claim made. By learning the details of your policy, you can help to ensure that simple mistakes will not equate to significant premium hikes on your homeowners insurance and get back to more enjoyable things, like deciding if your yard has enough space for the new pet.

Extent and Frequency

When you make a claim, the insurance company will first evaluate how severe the damages are, as well as how much money you are requesting. Some types of disasters are more forgivable than others. For example, if you live in a hurricane-prone area, then the insurance company understands that there is always the risk of such a storm inflicting damage on your home. In fact, you probably pay more for the policy for this reason, too. On the other hand, there are more preventable scenarios that an insurance company might not be as forgiving of, such as roof damage and extensive mold growth.

Not only is the extent of a home's damage important to the insurance company, but the amount of claims you make can also impact your overall rates. A minor claim is often not enough to impact your rates whatsoever--that is, unless you make several minor claims within a short period of time. Many homeowners do not realize that making too frequent of claims is often much worse than filing a claim for a natural disaster in terms of increased policy premiums. In order to reduce the rate in which you make claims, you should make the maintenance and safety of your home a top priority. This will end up saving you both money and unnecessary headaches.

Deciding to File

Accidents and unpredictable disasters can occur at any time, which is one of the many reasons why having homeowners insurance is so beneficial. When it comes to assessing your rates after you make a claim, the insurance company is likely to evaluate who was at fault. A natural weather event is not your fault, but other scenarios, such as a fire and plumbing problems might be. One of the primary reasons that rates might increase is due to the fact that the homeowner was at fault for subsequent damages. Keep in mind, however, that even claims made that stem for situations that are not your fault might increase your overall premiums.

Once an insurance company sees you as a high risk policyholder, then your homeowners premiums could increase by as much as 30 or 40 percent. The downside is that the hikes might not be temporary, especially if the past claims you have made on your policy were your fault. Since any claim has the potential to directly impact your insurance rates, it is important that you assess the urgency of your claims before submitting them to the company. Keep in mind that several minor claims overtime can cause a red flag as well. If a particular damage is extremely minor, then you might consider foregoing making a claim in order to risk paying more money in the long-run for increased insurance premiums.

safe secure

Enter your zip code for affordable home owners insurance quotes


What People Are Saying

"We found your site and changed policies after paying a huge deductible when a storm layed a tree in our living room. Our new deductible is almost 30% less and our monthly payment also went down. Thanks!"

- Sharon and Lewis K, St Louis MO