How Policy Rates Are Affected By Homeowners Insurance Claims
When mayhem strikes your home, the first thing you should do after the dust settles is file an insurance claim. However, a common concern is how filing an insurance claim will then directly affect your insurance policy. Here’s how it can affect the premium rates.
Usually, your premium rates will increase if you file a single home insurance claim. Monthly premiums rise by an average of 9% after a single claim on your home insurance policy, according to a CNN report.
Premium rates will continue to rise even higher if you establish a second claim within 7 years. They will usually rise by an average of 20%.
The premiums for home insurance do not go up for filing of a single claim. They go up regardless! Every year, the insurance company presents the proposed rate increase to the Department of Insurance. For ex. They propose a 12% increase. The DOI says, No you can only increase by 6.5%…then that increase is spread across the board. In other words, unlike auto insurance, your rate does not go up just because you file a claim….it goes up regardless.
Even the most minor issues like water damage or roof damage will jack up the prices of your premium, not just after fatal damage like a fire. The size of the claim, however, has a minor impact on how much the premiums will rise. If your claim costs a whopping $100,000 or $5,000, the amount of the claim has little influence on the premium rates.
Public adjusters will shepherd you into understanding this process. They manage these claims from beginning to end and will allow you to maximize compensation with a fair deal.
It’s in your home insurance company’s interests that you stay away from filing a claim because insurers will do whatever it takes to minimize their liability and maximize premiums.