Filing a home insurance claim could unfortunately cause your premiums to rise even higher. Whether they go up and by how much depends on many factors, including the type and severity of the claim.
The following claims are likely to have the greatest impact on your insurance premiums.
- Fire claims– Whether your home is partially damaged or completely destroyed by fire, this type of claim can seriously affect your home insurance rates.
- Liability claims– When a person is injured or their personal property is damaged at your house the liability aspect of your policy comes in effect to help them recover costs of medical expenses and/or replacement of their damaged property; thereby affecting policy premiums.
- Theft claims– When something is stolen or damaged as a result of theft, your premiums may increase as a result of a claim. Be sure to speak with your insurance professional to learn ways to potentially offset the increase, such as installing security or alarm systems.
- Water damage claims– This claim type accounts for a huge number of claims in Canada and house insurance policies in general cover damage as a result of an internal water problem. Typical policies do not cover damage as a result of water entering overland. It’s important to speak to insurance professional to learn coverage exemptions and limits to ensure you have the coverage you need.
- Weather related claims– Claims from the natural disasters, such as tornadoes, earthquakes or high winds will increase your insurance rates.
While the purpose of home insurance is to help homeowners financially recover from damage or loss, there’s a very good chance that a claim will result in an increase in rates.
What Else Affects Home Insurance Rates?
Other factors that could increase your rates include:
- Age of home: As your home gets older, it may become more vulnerable to damage from aging systems such as old pipes or leaky roofs.
- Risky elements: Adding features that could cause injury or damage can raise your premiums. These include a wood stove or wood furnace, trampoline or other potentially dangerous play area; or owning certain breeds of dogs.
- Real estate and construction costs: If home values or construction costs are rising in your area, homes will cost more to repair or replace. As a result, home insurance premiums may rise too.
- Your credit score : In states where it’s allowed, insurance companies typically review your credit-based insurance score credit to assess your insurance risk, which is the likelihood that you’ll end up filing a claim. This type of score is distinct from the credit scores lenders use, and is calculated based on different factors.
Keep in mind that the more home insurance claims you file, the more expensive your insurance premiums become. Even if you’ve recently moved, but have made claims in the past, this is also true.