Your homeowners insurance is designed to reassure you that you will be able to pay for damages to your home or possessions if an accident or other catastrophic event should occur. Filing claims can cause your premiums to rise, at least for a little while. Some insurance companies will raise their premiums if an excessive amount of claims are filed in your neighborhood in a short period of time.
How Much Does Your Homeowners Insurance Go up after a Claim?
As soon as you file a claim, you may notice a change in your insurance premiums. The type of claim you file, where your home is located, and the amount of damage you incur will play a role in how much your premiums go up. The insurance company may also look at the number of claims you may have filed in the past. The level of your potential risk in terms of natural disasters and other outside elements may also cause your premiums to rise.
Why Do Insurance Premiums Go up after a Filing a Claim?
Insurance premiums normally go up after a homeowner files a claim simply because their risk of filing a future claim increases dramatically. Incidents that involve dog bites, water damage, and theft are often recurring, which means you may be filing more claims in the future. Eliminating the risks associated with these types of events, such as installing a home security system, may help mitigate such risks and lower your premiums.
How Long Does a Claim Affect Home Insurance Rates?
Most premium increases that occur after a claim has been filed are only temporary. While a claim may stay on your records for about five years, it may be dropped off in three years or less. On the other hand, if the claim is rather large or questionable in any way, it may stay in place for as long as seven years. Once your premiums start declining, you will notice a change, but you might never get your original premium back.
Are There Times When Companies Can’t Increase Rates after a Claim?
In most cases, rates cannot be increased if a homeowner files one claim or asks about filing a claim but never completes the process. Another time when rates will not be increased is if the damage is caused by a natural disaster or severe weather event. In most cases, an insurance company will not raise premiums if the event was out of the policyholder’s control and had no indication the event was possible.
When you have questions about why insurance premiums change, you need to go to the source. Call our agents at Gant Insurance Agency today! Understanding why premiums go up is the best way to figure out how to bring them back down. Our agents can provide you with all of the information you need and will guide you through the process of filing claims or simply evaluating your policy. Contact us today to learn more!