Unquestionably, homeowners insurance is crucial for ensuring you are financially protected and your home is maintained even if something unexpected happens. Nevertheless, if your home experiences damage caused by anything like a natural disaster or a break-in, your homeowner’s insurance will begin to work.
Hence, it compensates and reimburses for the replacement and repair required. This brings us to the question: does homeowners insurance go up after a claim?
While your policy’s rate will be influenced when you file a claim, it is important that you understand what happens after you file one, which will help you realize when to file a claim.
How Do Claims Affect Home Insurance Premiums?
As mentioned previously, it is essential to know how claim filing affects your homeowners insurance premium. Well, here is what you need to know: when a policyholder files a claim, their insurance provider will see them as a higher risk, therefore increasing the cost of premiums.
On the other hand, this is a result of the historical claim data that insurance companies use to foresee future risks. Hence, if you have filed a claim previously, they will expect and predict that you are likely to file another one in the future. In other words, homeowners insurance premiums are determined by considering the probability of a claim filing taking place.
Does Homeowners Insurance Go Up After a Claim?
Generally, yes, homeowners insurance premiums go up after filing a claim, but this is only temporary. However, this is affected by and based on various factors. Here are the factors that affect your homeowners’ insurance premium when and after you file a claim:
- Your claims history.
- Type of claim.
- Location (where you live).
- Degree and magnitude of the damage.
- Your insurance provider’s policies.
On the other hand, the rate at which your insurance premium is affected after filing a claim is not the same. For instance, when you file a claim against liability or theft, it impacts differently than when you file one related to natural disasters.
How Much Does Your Homeowners Insurance Increase After a Claim?
The amount your premium increases or goes up after filing a claim can differ vastly. According to some reports, a single claim can cause your premium to increase from 9% to 20%. But this can vary depending on the type of claim, where you live, and your insurance company. Filing multiple claims in a short timeframe can significantly affect your premiums as well.
Average Home Insurance Premium Increase
Your claim frequency and claim type will make your premium increase. The claims that make home insurance premiums expensive include:
- Accidental fires.
- Mold damage.
- Dog bites.
- Water damage.
- Any liability claim.
Here is the average percentage of your premium increase after filing a claim, according to the type of claim:
| Type of Claim | One Claim | Two Claims |
| Theft | 27% | 55% |
| Medical | 18% | 34% |
| Fire | 29% | 60% |
| Weather | 16% | 29% |
| Water | 25% | 50% |
| Liability | 25% | 52% |
Why Do Insurance Premiums Go Up After Filing a Claim?
A premium increase occurs when your insurance provider believes that you will likely file another one in the future. It is quite common among claims related to theft, water damage, and dog bites. Thus, to cushion and reimburse for another possible claim takeout, they will increase your premium.
To repeat, it is situational whether your insurance premium will increase after a claim or not. Some claim types affect your rates more significantly than others. To understand better, be sure to expect your premium to go up if your claim falls under this category:
- If you file more than a single claim over several years.
- You live in a high-crime area.
- If you reside in severe weather-prone areas.
- Your home has a history of claims.
- If you have filed liability claims previously.
Besides, your premium is likely to increase if you file a liability claim rather than a property damage claim.
How Long Does a Claim Affect Your Rates?
How long does a home insurance claim stay on record? This time length differs, but it is usually around 3 to 5 years. Besides, the duration is affected by certain details of your policy and your insurance company as well. After this period elapses, the claim will impact your premium less, but that is if you have not filed another claim.
Here are some tips you can use to maintain the impact of claims on your premium:
- Consider a higher deductible.
- Understand your quote.
- Maintain your home.
- Look around.
How to Decide If You Should File a Claim
Having a homeowners insurance policy is a safety net against unexpected losses and damages that can lead to financial losses. Here are some scenarios when you should and should not file a claim.
When to file one
If the repair costs pass or supersede your deductibles, you can file a claim. For example, if your roof is damaged by a wind storm and the repair cost is $10,000 with a deductible of $1,000, it will be helpful to file a claim and pay the deductible. Another scenario in which you can file a claim is if there is a total loss or significant damage.
When not to file a claim
If the replacement or repair cost is almost equal to your deductible, it is more economical to cover the damage yourself than to experience an increase in your insurance premium rate. Secondly, if you have filed several claims in the past, it is not advisable to file a claim.
