Can Filing a Claim Increase Your Homeowners Insurance?

Can Filing a Claim Increase Your Homeowners Insurance?

Feb 15, 2023


Effect of filing a claim on home insurance

When it comes to homeowners insurance, most of us are familiar with the basics. We pay our premiums in order to protect ourselves and our personal assets in case of an unexpected event. In this article, we’ll discuss why home insurance premiums may go up after filing a claim, how long a claim affects home insurance rates, and when are companies not allowed to increase rates after a claim.

Factors That Determine the Increase in Premium Rates

Homeowners insurance rates may go up after filing a claim, but the extent of the increase depends on:

  • Type of claim
  • Severity of the damages
  • Your claims history
  • Location of residence
  • Insurance company’s policy

Reasons for a Hike in Insurance Premiums After Filing a Claim

When you file an insurance claim, it is an indication that you may be a high risk to insure in the future. Insurance companies will typically assess how likely it is that you will file additional claims in the future, and they will adjust your premium accordingly.

The most common reason for an insurance rate increase is a large claim or multiple claims. If you have a large claim, this may indicate to the insurance company that you are more likely to file additional claims for similar events in the future. Filing multiple claims within a certain period can also cause your insurance rate to increase.

The size and number of claims and the type of claim you file can also affect your insurance rate. Claims for damage caused by natural disasters, such as hurricanes, floods, or earthquakes, may result in higher rates. This is because these events are unpredictable and can cause extensive damage.

The insurance company’s policy may also be a factor. Your premium rate may go up after filing a claim regardless of the size or type of claim because your insurance provider may want to limit its risk by increasing the premium for any claim, regardless of the outcome.

How Long Is the Increase in Home Insurance Rates Effective?

The length of time that a claim will affect your home insurance rate depends on the insurance company’s policy. Generally, the rate increase may last for three years from the date of the claim, but this varies from company to company. When an insurance company reviews your claim, they may increase your rate for a longer period of time, which can extend up to seven years from the date of filing the claim.

When Can Companies Not Increase Rates After a Claim?

In some states, insurance companies are not allowed to increase rates after a claim in certain situations but the laws vary from state to state. Generally, insurance companies are not allowed to increase rates for:

  • You enquire about a claim but don’t file one
  • A denied claim
  • A single claim
  • Claims for damages caused by natural disasters

It is important to understand how a claim can affect your homeowners insurance rate. When you file an insurance claim, your insurance company will typically assess your risk and adjust your premium accordingly which can lead to an increase in your premium rate. Additionally, it’s important that you must be aware of the laws in your state as some states do not allow insurance companies to increase rates for specific types of claims.

Get the Best Homeowners Insurance for Your Needs with Bell Black Insurance

At Bell Black Insurance, we understand how important it is to have the right homeowners insurance coverage. We offer a variety of coverage options that can be tailored to meet your specific needs. Contact us today to get started.