Will My Homeowners Insurance Go Up If I File A Claim?

Filing a home insurance claim is an unfortunate part of homeownership, and it can sometimes cause your premiums to jump. However, it’s important to know that not all insurance claims are created equal. How much your premium will jump (if at all) is dependent on the type of claim and how often you file.

While these moments will hopefully be few and far between, your insurance company should be ready to make this process as smooth as possible. After all, it’s one of the few times you actually interact with your insurance provider, so you should be their top priority.

To help you navigate the world of insurance claims, we’ve broken down everything you need to know about premium hikes and when it’s worth filing a claim.

Key takeaways:

• Claims from easily preventable perils can cause your premiums to jump. However, catastrophes that are out of your control won’t cause the same increase as they’re less likely to reoccur.
• A home insurance claim will stay on your home’s claim record for 5 to 7 years.
• You can find your home’s claim history in your CLUE (Comprehensive Loss Underwriting Exchange) report.

Home insurance claims and your policy rate

While your home insurance policy is there to protect you in the event of a hazard or other covered peril, that doesn’t mean you’ll end up filing a claim every time something goes wrong. Filing a claim increases your risk in the eyes of your insurance provider, and as your risk goes up, so do your premiums. You can expect to see a rate increase of 9% to 20% per claim, though this number varies by the type of claim and the number of claims you’ve filed previously. This is because insurance providers use your claims history to determine how likely you are to file more down the line. But not every claim will cause the same rate increase.

 

Watch out for high-risk claims

Claims from easily preventable perils, like fire damage in your kitchen or damage from a water backup, can cause your premiums to jump. Catastrophes that are out of your control, such as a tree falling on your house during a storm, wouldn’t cause the same jump as they are less likely to reoccur.

If your home is in a high-risk area, you can generally expect to pay a higher premium each year for your home insurance.

If your home is in a high-risk area, such as a tornado or hurricane zone, you can generally expect to pay a higher premium each year for your home insurance (depending on what perils are covered in your original policy). This is true no matter if you have a lengthy claims history or not, as everyone living in that area is more of a risk to insurance providers.

How many home insurance claims are too many?

If you’ve filed more than three claims in the last year, you’ll likely face higher premiums, and it may become more difficult to get insurance coverage at all (via Money Crashers). This is especially true if the claim payout was particularly high each time, as they usually are with catastrophic or liability claims. This makes you a much bigger risk to providers and can cause issues if you’re hoping to change providers or save money on your yearly premium. Like minor property or belonging damage, small claims aren’t as big an indicator of future risk.

How long does a home insurance claim stay on record?

A home insurance claim will stay on your home’s claim record (more on how to get this report below) for five to seven years. According to the LA Times, if the home's sellers have filed a claim, it could affect your policy premiums. It’s vital to ask for a copy of this report before buying a new home so that you can be aware of any underlying issues. This can also affect your ability to get home insurance in the first place, even if you're a first-time buyer, so getting a home with a relatively clean slate is your best bet.

A home insurance claim will stay on your home’s claim report for five to seven years, so that means if the home's sellers have filed a claim, it can affect your policy premiums.

Where to find past claims on your new home

You can see your home’s claim history in your CLUE report. CLUE (Comprehensive Loss Underwriting Exchange) is a database that monitors your home’s claim history. All insurance companies report any claims made to this (or a similar) database. 

They also use this database to find claims on your home from other providers to decide how to price your home insurance premiums. Other information included in your CLUE report consists of the claim numbers, the date of the loss, claim amount and claim cause.

Get the coverage you need — and keep your rates low

There are a few things you can do to get the coverage you need and avoid paying sky-high premiums. 

• Pick an insurance provider that rewards you for taking proactive steps like installing smart home devices to improve your home’s health (like us).
• If you don’t want to pay for a home warranty, look for a company with their own home repair services to make sure you get the help you need when you need it. Learn more about the difference between warranties and home insurance here.
• Be strategic about when you file claims. Filing low-cost claims or multiple claims within the same year isn’t always the best idea.
• Remember, the type of claim you file matters too. Filing a weather-related claim is less risky than a liability or personal property claim, given they are more likely to reoccur.

Finally, understanding the laws that prevent companies from raising your home insurance rates is paramount. These laws vary by state, but generally, you won’t see an insurance claim spike from any weather-related claims. Some states even ban price hikes (or non-renewals) for small claims, claims denied, or claims that didn’t end up costing providers anything. For a complete list of laws in your area, it’s best to check with your state government.

For a pain-free home insurance claims process with a company that has your back, give Hippo a call to find total home wellness. We’re committed to being here for you with the most reliable, caring and prompt response possible. A dedicated claims concierge will be with you every step of the way.