Does Filing a Claim Increase Your Homeowners Insurance Costs?

Does Filing a Claim Increase Your Homeowners Insurance Costs?

Apr 19, 2023

Homeowners Insurance

Effect of filing a claim on homeowners insurance cost

As a homeowner, you understand the importance of having homeowners insurance to protect your property and costly belongings. However, when you file a claim with your insurance company, you may wonder if your insurance premiums will increase. Whether or not the premiums increase depends on several factors, including the type of claim, the amount of the claim, and your insurance company's policies. This article will explore whether your homeowners insurance will go up after a claim and why.

How Much Your Homeowners Insurance Might Increase After Filing a Claim?

It varies depending on the insurance company and the specifics of your claim. Some insurance companies may raise your premiums by a few percentage points, while others may increase your premiums significantly. Sometimes, your insurance company may cancel your policy after you file a claim.

Reasons Why Insurance Premiums Increase After a Claim

Insurance companies raise premiums after a claim because they view you as risky. If you have filed a claim in the past, it indicates to the insurance company that you are more likely to file another claim. Insurance companies use complex algorithms to calculate the risk of insuring you, and they take into account your claims history, credit score, and other factors. If your risk increases, they may raise your premiums to offset that risk.

It's also important to note that the type of claim you file can impact how much your insurance premiums will increase. For example, if you file a claim for damage caused by a natural disaster, your premiums may not increase as much as they would if you have filed a claim for theft or vandalism. Natural disasters are considered out of your control, while theft or vandalism can be controlled with preventative measures or home security.

How Long Will a Claim Impact Your Home Insurance Rates?

Generally, a claim will impact your insurance rates for at least three years. However, the length of time can vary depending on your insurance company and the specifics of your claim. If you file multiple claims over a short period, your insurance company may raise your rates for a more extended period.

While it's impossible to predict precisely how much your insurance premiums will increase after a claim, avoid filing minor claims to prevent rate hikes. Also, consider the deductible amount before filing a claim. File a claim only if the damage or loss is more expensive, and that makes sense to pay deductibles out of pocket and cover minor claims (that cost less than the deductible) yourself to prevent rate hikes.

Get Best-in-Class Homeowner Insurance from East End Insurance Agency

Whether you are looking for a basic or a comprehensive policy with customized coverage options, East End Insurance Agency can help. Contact us today to secure the right home insurance policy that is built around your unique needs and budget.

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