Will I Have a Higher Rate if I Make More than One Claim a Year?

The short answer to this question is yes; making claims is going to raise the rates that you pay for your homeowners insurance. But not all claims are going to increase the rates of your policy, and it pays to learn a bit about the circumstances that lead to price increases before making a claim on your policy. While a small increase in your premiums may seem harmless enough, you will be paying into your policy for many years, and small increases can lead to thousands of dollars in extra expenses. So the key is often deciding when to make a claim and when to use your own assets and money to make repairs or replacements.

What is the Claim?

The nature of your claim is going to have a large effect on detemining premium rates. If you do submit several claims, or one claim per year, the insurers are surely going to raise your rates regardless of the cause of the damage or losses. In some cases, people that submit too many claims on their homeowners insurance may not even be able to renew their policies with that company. The following are just a couple of the things that insurers will consider when deciding whether or not to raise your rates.

It is important to remember that insurers are going to loose money on their policyholders that submit expensive or numerous claims, so they will increase the premium rates of those individuals. So if you submit a large number of claims for damages that could be considered your fault, you will most likely find that your house insurance rates are going to go up. On the other hand, if you submit a claim for something that happens to your home that is obviously out of your control, you may be able to keep your same rates. Storms and other natural disasters cannot be controlled, and often lead to claims that will not cause a price hike.

One type of claim that will likely lead to increases in your homeowners insurance rates is a liability claim. Say for example you have a dog that bites a neighborhood jogger, and they decide to press charges and sue. If you use your liability house insurance to pay for the lawsuit, you should expect to pay increased rates on your policy in the future. Increases from claims can be up to 40%, and seven several claims can cause your insurer to drop you from their coverage.

Paying Out of Pocket

Instead of submitting claims and risking large price increases, some customers will decide to just pay for their claims out of pocket. If you have smaller damages happen to your home or belongings, you may save a lot of money by just covering the expenses on your own. Homeowners insurance should be kept and used for catastrophic damages rather than for any little problem that may come up while you live in your residence.

If you do not want your rates to go up from making claims once a year, the key may just be searching for a company that will promise low rates to their customers. Certain companies are willing to forgive some accidents, and will allow their policyholders to make claims without the risk of rate hikes. Use the tools and information that we offer on our website to search for the local companies that have the best policies, and then pick a homeowners insurance plan that will leave you with the rates you want.

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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