Does Filing an Insurance Claim Raise Your Rates?

12/20/2021 (Permalink)

Water damage in a Nassau Bay, TX home.

Does Filing an Insurance Claim Raise Your Rates?

Homeowners considering whether to file an insurance claim may be concerned about rate hikes. In general, filing claims is likely to result in higher rates. Find out more about why this is the case and a few possible exceptions.

Number of Claims

The number of claims a homeowner files will impact their insurance rates. It is usually the case that:

• The more claims that are filed, the higher the rates
  
• Some types of claims may result in higher rates or policy changes
  
• Too many claims may result in policy termination
  
  

A policyholder should consider whether filing an insurance claim for minor damage is worth raised rates or changes in coverage.

The Type of Claims

Rates will generally rise whether the losses claimed are partial or total. Factor in the following considerations:

• If the policyholder is at fault, rates are very likely to rise
  
• If the policyholder is not at fault, rates may or may not rise
  
• Some types of claims may raise rates and cause policy cancellation
  
  

Certain claims, including water damage or mold, may be more likely to result in significant rate hikes or policy changes. A separate flood insurance policy is necessary to cover a home flood.

The Insurance Provider

Some insurers are more forgiving of certain types of claims. Inquire about an insurer's rules regarding:

• Forgiveness or limitations
  
• Rate increases
  
• Reporting consultation for potential claims
  
  

A homeowner should be aware of policy terms and insurer practices. This information may increase the likelihood that coverage will offset damage cleanup and restoration costs.

A homeowner may want to set aside money in a savings account. Lower insurance rates by raising the deductible to match this amount. The homeowner can use these funds to cover minor damage instead of filing an insurance claim. If a residence sustains damage, obtain an estimate from a mitigation and restoration company in Nassau Bay, TX.