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Home Insurance Go Up After a Claim


If you file a claim with your home insurance company, there is a chance you'll see a higher rate when you renew your policy the following year. The amount your insurance company may raise your rates after a claim depends a number of factors, including:
  • The cause of the claim
  • Whether you've filed any additional claims in the past few years
  • The total cost of the claim
  • The state you live in
For example, if a hail storm shatters a few windows and damages some shingles on your roof, resulting in a $1500 claim and a $1000 payout (after a $500 deductible is applied), you likely wouldn't see a significant increase in your rates due to this claim alone. The claim did not cost the insurance company a significant amount, and your home is not necessarily predisposed to risk of future hail storms, as it may be to floods if you lived in a flood zone.
However, if your dog bites a neighbor's child, resulting in a $20,000 lawsuit, you will likely see a significant increase in your rates—especially if you maintain ownership of the dog.
Similarly, imagine you filed a $3,000 claim for water damage a year ago, due to a leak in your plumbing system. This year, you encounter new water damage, and you file a second claim for a comparable amount. Your insurance company is going to determine that your plumbing system poses significant risk of future damage, and will raise your rates accordingly.
You should consider the ultimate cost of a rate increase when deciding whether it makes sense to file a claim. Unless you stand to gain a significant amount of money from a claim, it might be better to skip filing it, and instead pay for the damage yourself. For example, imagine your home insurance policy costs $1,000 per year, you have a $500 deductible, and you've already filed one claim in the past three years. If you encounter a leak and minor water damage that will cost $750 to repair, you'd only gain $250 after your deductible was applied. Since that would be your second claim in recent years, your insurance company could impose a substantial rate increase. Over time, the cost of those increased premiums might exceed the $250 you gained from your claim.
If you are facing a rate increase and want to lower your premiums, you can consider changing your policy to one with a higher deductible. A higher deductible will mean you're on the hook for more of the initial cost when damage does occur, but it should lower your monthly premiums.

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