How Your Claims History Impacts Your Homeowners Insurance Rates

The more claims you have on your record, the harder it may be to find affordable, reliable coverage. That’s because many insurance companies raise rates or limit coverage if your home has a history of recent losses. Your insurance company may also refuse to renew your policy after a spate of claims.

That’s why it’s wise to use caution before you file a claim – you don’t want to inadvertently file a lot of small claims that drive up your policy cost or make you uninsurable in the future. In general, try to only file a claim when it’s at least two to three times higher than your deductible.

It’s also smart to take steps to prevent claims from happening. In fact, many companies offer discounts for some risk management measures.

Which Homeowners Insurance Claims Increase Rates the Most?

Some claims impact your rates more than others. Anything that could be prevented by you is generally viewed less favorably. Water damage claims from burst pipes, leaky faucets or flooded appliances, dog bites, injuries on your property and theft are considered preventable. Think about what you can do to prevent these things and make your property safer.

Insurers understand you can’t control damages from weather so you are penalized as much for these types of claims.

How Many Homeowners Claims Is Too Many?

Generally, if you haven’t filed more than one non-catastrophic loss claim in three years, and have no liability losses in three years, you may still be eligible for coverage. Two claims in five years may drive up the cost of your coverage. More than two claims in a five-year period may make it difficult to find coverage.

Where to Find Your Claims History

Thanks to the Fair Credit Reporting Act, you can request one free copy of your loss history report from CLUE per year. Your CLUE report is tied to your home’s address. So even if you haven’t filed a claim, the previous owner’s claims may appear on the home’s loss history. That’s why it’s important to ask for this report before you purchase a home.

You can also request your property loss report from A-PLUS, which does charge for the report unless an insurer turned you down because of A-PLUS data.

That’s true for CLUE, too – any time an insurer refuses to insure your home because of its report, you can get a free copy of it.