Will A Claim Make My Homeowner’s Insurance Rate Go Up?

Most homeowner’s don’t own their home outright, they have taken out a home loan or mortgage, and make monthly payments that go toward the purchase. Mortgage lenders require homeowner’s insurance to protect their investment in your home, having insurance is not an option. But even if you do own your home outright, you would still want to have insurance to protect your investment…things happen, so it’s really not an option.

Your homeowner’s policy can help you:

• rebuild or repair your home after a disaster
• replace personal property after theft or destruction
• protect you legally, and your guests financially by paying medical bills in case of an accident while on your property.

After a claim is filed, do your premiums automatically increase?

Once you have filed a claim for compensation on a covered loss, your insuring company then becomes financially responsible for paying for anything it legally owes. By filing a claim, your insurance provider may think of you as a higher risk, someone who is likely to file more future claims, which may lead to increased premiums.

Types of claims that could cause an increase in your rates are:

Most claims can result in higher premiums. The severity of the claim and the frequency of submitted claims will affect your rates. Because all claims are not created equal, the following rank the highest, with fire and liability at the top of the list.

• Fire
• Liability claims
• Theft
• Water Damage
• Dog Bites
• Mold
• Vandalism

How long will a claim stay on your record?

Typically 5-7 years is the average amount of time a claim remains on your record, but a few companies are disregarding them after 3 years.

What can you do to keep your rates from going up?

Because Insurance companies are regulated state by state, raising rates varies depending on which state you live in. For instance, there are states don’t allow rates to increase after:

• Inquiries about basic claims

• Claims made that don’t require a financial reimbursement

• A single claim

• Claims filed due to natural disasters or extreme weather

There are things you can do to avoid your rates from increasing:

1. Only file a claim that is either caused by a catastrophe or one that you can’t afford to pay out of pocket.

2. It’s best not to file more than one claim within a 3-5 year period

3. Your CLUE report can tell you about your home’s claim history, and can be run once a year.  Click here to learn about your C.L.U.E. report.

4. It’s wise not to file a claim that is less than twice your insurance deductible.

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