Does Homeowners Insurance Go Up After a Claim?
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Your home insurance rate may go up after you file a claim. It depends on the type of claim, your claims history and an assessment of your property. Your rate is more likely to go up if you have made liability claims in the past, own a property with a history of claims or live in an area with frequent severe weather.
How much do home insurance premiums increase after a claim?
Your premium increase after a claim depends on the nature of the claim and your claims history.
For instance, a liability claim can be expensive and tends to raise rates much more than a dwelling or personal property claim.
Rates may also change because of the number of claims from your surrounding region, as large-scale weather events and other regional issues often result in increases.
Why do home insurance premiums increase after a claim?
Home insurance premiums increase after a claim because insurance companies believe you're more likely to file claims in the future. Consequently, your rates are likely to increase after a claim if you:
- Have a history of making liability claims
- Own a property with a history of multiple claims
- Make more than one claim over a seven-year time span
- File claims that suggest your property is in a high-crime area
- Make claims that show your area has more severe weather
Home insurance premiums can increase after liability claims
Liability claims are far more likely to lead to greater home insurance policy rate increases than a single claim on damage protected by dwelling or contents coverage. Liability claims can lead to a big rate increase, because they often involve high costs and litigation.
If you've made liability claims or are more likely to make one, — because of owning an aggressive dog breed, for example — you may even have difficulty renewing your policy.
Home insurance premiums can increase after multiple claims
Multiple claims can keep increasing your premium, because insurance companies calculate that you're more likely to make more claims in the future. The cost of your homeowners policy could increase quickly if you make multiple claims in a short period of time. This includes not only the history of your claims, but also the history of claims on your home filed by previous occupants.
Say you file a claim for water damage caused by leaky pipes or for a broken window from a break-in. If the company finds that the previous property owner made a series of similar claims over the past three years, it might indicate a persistent problem.
Insurance companies can track the previous seven years of a home's claim history using Comprehensive Loss Underwriting Exchange (C.L.U.E.) reports. Even if you've never filed a claim, a history of similar claims by another owner may lead to a big increase in your home insurance cost.
Home insurance premiums can increase after weather-related claims
You might see higher homeowners insurance premiums if your property is in an area that has frequent severe weather — or is more likely to in the future.
For instance, since Florida and Texas often have severe weather, policyholders in those states face some of the highest home insurance costs in the country. Companies have also had to increase prices in parts of California and Canada in response to uncommonly strong wildfires.
As insurance companies get more storm data, it's safe to say they'll continue to reassess their prices after each storm season.
Filing a single weather-related claim may not necessarily result in a higher premium. But understanding how weather trends could bring insurance changes for your community can keep you more informed about potential price increases.
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