DOES FILING A HOMEOWNERS INSURANCE CLAIM AFFECT INSURANCE POLICY RATES?

If your home has suffered from a fire, theft, hail, flood, wind, or storm damage, then it may be in your best interest to file an insurance claim.

However, you may also be worried about how it’s going to affect your insurance policy going forward. How does filing a claim affect your insurance policy? Today, we’re explaining what you may want to know before filing an insurance claim, and how it can affect your insurance policy rates in the future.

Typically, filing a single home insurance claim will raise your premiums.

As reported by CNN, monthly premiums rise by an average of 9% after a single claim on your home insurance policy.

If you make a second claim on your home insurance policy within a certain period of time – say, 7 years – then home insurance rates will almost certainly rise even further. With a second claim, your premiums will typically rise by an average of 20%.

THE SIZE OF THE CLAIM HAS LITTLE IMPACT ON INSURANCE PREMIUMS

You might expect your home insurance company to raise premiums after, say, a house fire where you lost everything. But you might be surprised to see premiums increase after a relatively minor issue – like water damage in a basement bathroom.

However, the size of the claim has little impact on how much your premiums will rise. Whether your claim is costing your insurance company $100,000 or $5,000, the amount or size of the insurance claim generally has much less influence on insurance premium rates than just the simple fact of if a claim has been filed or not.

THE TYPE OF CLAIM DOES IMPACT INSURANCE PREMIUMS

The type of claim you make does have an impact. Certain claims will raise premiums more than others.

Liability claims, for example, including personal injury claims, seem particularly expensive. You can expect your home insurance company to raise premiums by about 14% after a single claim on your home’s liability coverage.After all, writing insurance coverage is based on using historical information to predict the amount of risk for potential insurance claims. When there are large natural disasters or catastrophes, with high numbers of insurance claims, that becomes part of the historical data used by insurance companies for determining insurance coverages and premiums

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