Americans pay an average rate of $2,305 a year for home insurance for a $300,000 policy with $300,000 liability and a $1,000 deductible. But that number can be higher or lower depending on where you live and several other factors, including the number and the types of insurance claims you file.

Homeowners file claims for everything from water damage and weather-related property damage to theft, fire and lightning damage and personal liability.

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Will my homeowners insurance go up if I file a claim?

Yes, homeowners insurance rates increase after you file a claim typically. The increase depends on the claim’s type and size and how many claims you’ve filed in the past few years. 

Insurance claim history can increase your rate in several ways.

If you have a history of filing claims at previous homes or places you lived, a home insurance company may increase your rate. In that case, the insurance company views you as riskier and thinks you’re more apt to file an insurance claim.

Key Takeaways

  • Home insurance claims increases your insurance rates, and the increase depends on the claim’s type and size and number of claims filed in the past years.
  • Raise your deductible to reduce your home insurance premium especially after filing a claim.
  • Filing a single claim in the span of five years can lead to potential premium increases. However, filing two claims in a row may result in higher rate increase.
  • If the claim’s potential cost is less than your deductible, it is better to avoid filling a claim and pay out of pocket.

How do you avoid that? Don’t file claims when you can.

"Insurers will say to you, 'if it wasn't your fault, it won't affect you at all and we won't penalize you for it in any way,' but because all claims get reported to the CLUE database -- the Comprehensive Loss and Underwriting Exchange -- the safest thing for a consumer is to not file small claims and pay for them out of pocket, [just] to be sure it won't affect you," says Amy Bach, executive director of United Policyholders, a consumer advocacy group.

Bach says part of the challenge is that the process home insurance companies use to determine how claims affect rates isn't transparent. Since each insurer has its own underwriting guidelines and rating rules, it's almost impossible for consumers to get a straight answer about how claims will be factored into their rate, Bach says.

However, the worse your risk profile looks and the more claims on your record, the less attractive you are to an insurer. Through CLUE, insurers can access information on the frequency and type of claims you file -- two variables that can increase your rates.

How much do home insurance rates go up after a claim?

Filing a single claim over a five-year period may lead to premium increases. However, a second claim will increase your home insurance rates even more.

Here are the top average home insurance percentage premium increases based on claims:

  • Filing a second fire claim -- 60%
  • Filing a second theft claim -- 55%
  • Filing a second liability claim -- 52%
  • Filing a second water damage claim -- 50%
  • Filing a second medical claim -- 34%
  • Filing a second weather claim -- 29%
  • Filing a fire claim -- 29%
  • Filing a theft claim -- 27%
  • Filing a liability claim -- 25%
  • Filing a water claim -- 25%
  • Filing a medical claim -- 18%
  • Filing a weather claim -- 17%

 

Do insurers view home insurance claims differently?

Yes, insurers have their own underwriting processes, so some insurers increase your rates higher than others if you file an insurance claim.

"Generally, whatever your insurer's policy is and whatever their internal guidelines are will dictate what the impact of a claim will be," Bach says.

When to file a home insurance claim -- and when not

One important rule of thumb for filing a claim is to look at the cost compared to your deductible. If the claim’s potential cost is less than your deductible, it's better to pay out of pocket. That’s especially true if this isn't your first insurance claim.

However, one exception is liability claims. It's usually a good idea to file liability claims if you're concerned that you'll get sued.

"If the claim is below your deductible, you definitely do not want to file it -- there's nothing to be gained," Bach says. "Unless someone got injured and there's a possibility they may sue you. In that case, you need to let your insurer know."

If you're concerned about maintaining an affordable homeowners insurance rate, especially after filing a claim, consider carrying a higher deductible to reduce your premium. Increasing your deductible can save you hundreds of dollars annually.

Making improvements to your home also can help. But Bach stresses that it's even more critical to be a knowledgeable consumer.

"We always encourage people to ask the question, ‘what are your rules, so that I know and can make informed decisions,’” Bach says.

What else increases home insurance rates?

Beyond claims, homeowners insurance premiums can increase for several reasons, such as:

  • More homeowners insurance claims in your area
  • Extreme weather
  • A crumbling roof
  • A pool, hot tub or outdoor spa
  • Pets
  • Age and construction of home
  • Credit history

More claims in your area

When you renew your insurance policy, you may receive a higher rate if an insurance company views your area as a higher risk. This can be due to more burglaries or thefts in the area. You also might encounter higher home insurance premiums if your area is more susceptible to extreme weather, such as hurricanes and tornadoes.

Home upkeep issues

If your home needs repairs, this can increase your homeowners insurance premiums, too. An old roof or a bad foundation are potential safety hazards. Those issues make it more likely you'll claim a loss. Hence, the higher rates.

Features in your home

Certain features of your home can also increase your insurance rate. Having a pool, hot tub or outdoor spa can increase your homeowners insurance premiums. Those items create greater liability and a risk of injury or death. From 2005-2014, there were more than 3,500 unintentional drownings in the U.S. It's part of the reason the Insurance Information Institute recommends homeowners increase their liability coverage from $300,000 to $500,000.

Pets

The type of pet you own additionally affects your rate. Companies may have an exclusion list for certain breeds of dogs and exotic pets. Depending on the breed, certain companies may not insure you. Others may view you as more of a risk and lead to higher rates.

Construction of home

The age and construction of your home are two other factors that affect your rate. The average construction costs in your area and whether your home is new affect its rebuilding costs. New construction homes get a 40% homeowners insurance discount on average. Older homes may be more expensive to rebuild because the materials used to reconstruct them can be more costly and not as readily available as newer construction materials.

Poor credit

Similar to other forms of insurance and consumer loans, poor credit history can lead to higher rates. Insurer use what's known as an insurance score based on your credit history to determine your risk level. A history of late payments or high outstanding debt may indicate to an insurance company you're risky to insure. To offset this risk, a homeowners insurance company may charge you a higher rate.

But your claims history could be even more important than all these factors in what you pay. Be careful not to file home insurance claims unless it’s absolutely necessary. Otherwise, you’ll pay more for your home insurance policy.

Does a roof claim raise insurance premiums? 

Yes, just like any other insurance claim, a roof-related claim may mean higher homeowners insurance rates. 

Home insurance companies place great importance on roofs. They want to ensure your roof is in good order. Home insurance companies occasionally send appraisers to review their insured properties to make sure they’re in good working order. 

They check the home from the street to see if there are any issues that may happen, such as a giant overhanging tree or cracked and bent shingles. 

Your home insurance company may notify you if it finds an issue that it wants addressed. For instance, the insurance company may request that you replace a roof if it’s showing wear.

Home insurance companies typically believe that a roof’s life is about 20 to 25 years. If your roof is about that age, your insurer may request that you fix the roof or it will stop coverage. 

How long does a claim affect your home insurance? 

Home insurance companies usually keep your claims on your record for between five and seven years. 

Having claims on your record means higher home insurance rates. It also may mean higher home insurance premiums if you shop around for a new insurance policy. 

Home insurance companies will look back at least five years of your claims history through CLUE. The CLUE report also includes information about claims of your property before you bought your home. Insurance companies usually limit that lookback to five years. 

 

Methodology:

Insurance.com in 2020 commissioned Quadrant Information Systems to field home insurance rates from major insurers in each state for nearly all ZIP codes in the country for 10 coverage levels based on various dwelling and deductible limits. The homeowner profile is a 35-year-old married applicant with an excellent insurance score; new business HO3 insurance policy for house built in 2000 with frame construction and composition roof. Other Structures: 10%. Loss of Use defaulted: 10%. Personal Property defaulted: 50%. Guest Medical limit: $5,000. Personal property: 50% of dwelling coverage for actual cash value.

Frequently asked questions

Does filing a home insurance claim hurt you?

Filing a home insurance claim may increase your insurance costs and it's worth considering whether you should you file an insurance claim. Sometimes it is best not to file a claim and cover the damages on your own.

Can homeowners insurance drop you?

If you complete 60 days period after purchasing your home insurance policy, then your insurer cannot cancel it. But after that, if you fail to pay the premium or have committed fraud on a claim before, then insurers can drop you.

Policies are renewed annually but dropping them is a possibility. If you file claims significant enough that your insurer may think of not taking the risk of insuring your home and they can decide not to renew your insurance policy.

Which claims are more likely to result in a rate increase or non-renewal?

Insurance companies consider some claims as more severe than others because certain types of damages or losses are more likely to happen again than other types. But filing a claim for water damages or mold claims may trigger an increase in your rates as well as the possibility that you will be dropped by your insurance company if it is deemed too risky.

It's important to consider your deductible when filing a claim. And filing a claim on your homeowners’ policy might not be worth if you have to pay more than the amount of your deductible.

How to lower your home insurance rates?

Home insurance rates may increase due to different reasons but there are some of the ways to lower your home insurance rates-

  • Bundle your policies:You can buy your auto and home insurance policy from the same insurance company to get a discount.
  • Increase your deductible:The deductible is the amount you have to pay before your insurance company starts to cover a claim. A higher deductible means less monthly payments and more savings in premiums.
  • Look for discounts:Companies offer various types of discounts, but not all of them provide the same type and/or amount in each state.
  • Improve your credit score:The insurer may use credit information to price your policy. Therefore, maintaining a sound credit score can help you save on insurance.

Can insurance companies raise your rates after a claim?

Yes, an insurance company can increase your rates after a claim, but it depends on the type of claim and how many times you've filed a claim.

Does homeowners insurance go up every year?

Insurance rates can fluctuate year to year, although it varies by insurer and property. If you have a bad credit score, filed 2 or more claims within a year or you have made major improvements in your home, it increases the cost of your home and thus it may result in the increased insurance rates.