My house sustained some damage during a storm last week. The contractor estimates the roof repairs will total almost $3,000. My uncle’s telling me that I shouldn’t file a claim. He says the claim will cause my homeowners insurance to go up, and because my deductible is $2000, it’s not worth it. Is he right? Will filing a claim cause my premiums to increase? So sorry to hear about the damage to your home. Yes, your uncle may very well be correct; filing claims with your home insurance can cause your premiums to increase, and it may not always be worth it if you have a high deductible. Then again, your rate may increase only slightly or perhaps not at all. If this is your first time filing a claim, your premium is more likely to remain about the same. Let’s take a look at reasons premiums increase after a claim:
Thankfully, your claim sounds straightforward. You’ll have to decide whether being reimbursed $1,000 is worth having your home insurance increase a bit (and having a claim on your record). Not sure whether you should file a home insurance claim? Turn to car insurance and homeowner insurance app Jerry to help you negotiate insurance coverage. Jerry’s agents can also assist you with finding the perfect car and home insurance policies for your budget. Give Jerry’s friendly agents a quick text or call—they’re available 24/7. WHY YOU CAN TRUST JERRY Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content. Browse More ContentInsurance in Your StateWhat Others Are AskingRead Advice From Car Experts At JerryBrowse By TopicsCar Insurance by MakeCar Insurance by StateIn this article:
Your home is probably the most expensive thing you own, and protecting that asset doesn't come cheap. The average homeowners insurance premium is $1,249 annually, according to the latest data from the National Association of Insurance Commissioners (NAIC). That cost is nothing to sneeze at, and filing a homeowners insurance claim could unfortunately cause your premiums to rise even higher. Whether they go up and by how much depends on a variety of factors, including the type and severity of the claim. How Does Filing a Claim Affect Your Home Insurance Premiums?When you contact your insurer to file a homeowners insurance claim, you'll be assigned a claim number and claims adjuster who will handle your claim. Generally, you'll submit documentation of the loss, and a claims adjuster will visit your home to survey the damage and estimate your payout. Different types of homeowners insurance claims may affect your premiums differently. A 2021 survey of claims found weather-related claims generally have the least effect on premiums, while fire-related claims have the biggest effect. Source: Insurance.com Keep in mind that these figures are averages, and depending on your situation, your home insurance premiums may not rise at all. A 2019
Consumer Reports survey found that 50% of respondents who filed a home insurance claim in the previous three years didn't experience a premium hike; just 12% said premiums rose by $200 or more annually. What Else Affects Homeowners Insurance Rates?Filing a claim isn't the only thing that can make your homeowners insurance premiums go up. Other factors that could increase your rates include:
How to Decide When to File a ClaimSince filing a homeowners insurance claim can have a big impact on your premiums, should you try to avoid making a claim? If the cost of the damage is not much more than your deductible, it likely won't be worth the risk that filing a claim could raise your rates. For instance, if repairing broken windows will cost $1,500 and your insurance deductible is $1,000, filing a claim would only net you $500 and could cause your rates to rise. If your insurance company gives you a discount for being claim-free, filing a claim will cost you that discount. Also consider whether you've filed any claims in the recent past. Even if the claim was with another insurer, it remains on your C.L.U.E. report for seven years. Filing another claim while previous claims still appear on your C.L.U.E. report could cause your premiums to go up. Previous claims by prior homeowners can also affect your home insurance rates. If you've lived in your home less than seven years and aren't sure if the prior owners ever filed a claim, contact LexisNexis for a copy of the C.L.U.E. Home Seller's Disclosure Report, which will list any insurance claims filed on the home in the last five years. You can get a copy online, by calling 888-497-0011 or by emailing . It may be frustrating not using the insurance that you've paid for. However, homeowners insurance is meant to help with major catastrophes, not with comparatively small home repairs. If you suffer a major disaster, by all means
file a claim. If the stakes are lower, weigh the benefits of filing a claim against the risk of higher premiums in the future. Ways to Lower Your Home Insurance PremiumsIf you need to file a claim and are worried your rates will go up, there are steps you can take to save on insurance. Consider increasing your deductible or bundling home and auto insurance. You can also make safety improvements such as removing dry brush near your home if you live in a fire-prone region, installing a security system or upgrading old plumbing. According to Consumer Reports, these actions could potentially save you 6% percent or more on insurance premiums. Improving your credit-based insurance score may also help keep your rates down. While this score is different from credit scores used by lenders, it takes into account many of the same factors, such as your history of on-time payments and your credit utilization ratio. Check your
credit score; if it could use improvement, your credit-based insurance score probably can too. Reducing debt, bringing past-due accounts current and paying your bills on time can help raise your scores—and possibly lower your premiums. What can cause home insurance to go up?Why Homeowners Insurance Rates Go Up. 1: Filing Claims May Mean Higher Premiums. ... . 2: Property Changes & Attractive Nuisances. ... . 3: Inflation Strikes Again. ... . 4: Construction Costs in Your Area Affect Your Rebuild Cost. ... . 5: Your Insurance Score Dropped.. How many claims is too many on home insurance?In general, there is no set amount to home insurance claims you can file. However, two claims in a five year period can cause your home insurance premiums to rise. Over two claims in the same period may affect your ability to find coverage and even lead to a cancelled policy.
Can I just keep the money from a home insurance claim?Can you keep the money from a homeowners insurance claim? Any excess home insurance claim money that you end up with is legally yours as long as your insurer doesn't ask for it back or you didn't commit insurance fraud for the additional amount.
What are the negatives of making a house insurance claim?Cons of Filing a Home Insurance Claim. Your Insurance Premium May Go Up. Although this isn't guaranteed, your homeowners insurance rates could rise after you file your claim. ... . Too Many Claims Mean Your Policy May Not Be Renewed. ... . If You Get a Claim-Free Discount, You Could Lose It.. |