Will Your Insurance Rates Increase After Filing a Claim?

6/4/2020 (Permalink)

Insurance claims are part of your agreement with your provider

An insurance claim can help you pay for the cost of cleanup and restoration services after a home flood or similar disaster. Yet you may have also heard that filing a claim can cause your insurance rates to increase. Read on for more information.

What Are Insurance Claims?

Insurance claims are part of your agreement with your provider. In exchange for a regular fee, also called a premium, the insurer will cover the expenses that result from:

• Damage
  
• Loss
  
• An emergency
  
  

What Can Cause Your Rates To Increase?
Some factors that affect your insurance rates are beyond your control. For instance, if you live in an area that is prone to floods and hurricanes, you may have to pay higher premiums than those who live in drier climates do.
When you file your insurance claim, the provider will also determine the cause of the damage. If the disaster was ultimately your fault, your rates will likely increase.
Certain losses, such as water damage, are often red flags to insurers. Even if you did not cause the harm, your rate could still go up by 20 to 40 percent. Depending on your provider, the increase could stay in effect for years.

When Should You File a Claim?
You should avoid filing too many water claims. That’s because insurers will look at how many claims you file. If you file numerous claims in a short amount of time, the insurance provider could hike your premiums or cancel your policy completely.
Since making a claim can increase your rates even if the damage was not your fault, you may want to pay for minor floods or leaks on your own. Save the insurance claims for major water disasters.
An insurance claim may greatly reduce your out-of-pocket costs following a home disaster. Yet your premiums could also increase, especially if the flood was your fault. For more information, contact your specific insurance provider in New Lenox, IL.