Will A Claim Increase My Insurance Premiums

When you purchase insurance protection for your home or for your automobile, you're doing so in the hopes that you'll never actually have to use it. If, however, you do suffer a loss that causes you to submit a claim on one of your policies, you may wonder whether this will cause you to experience an insurance rate increase. This is a question we commonly hear and, like many things having to do with insurance, there is no cut and dried answer besides, “it depends”.

The Risk Factor

When your insurer issued your homeowner's or automobile insurance policy, they did so with the expectation that you represent a good risk to them. This means that the amount of premium payments you'll be making to them will more than pay for any claims payments they're required to make on those policies. This allows them to earn a profit.

If they subsequently learn that your claims history indicates you're costing them money, it will cause them to increase your premium amount or discontinue your coverage altogether. You're no longer considered a satisfactory risk to them.

What Changes Their Risk Perception

Numerous factors can contribute to your experiencing an insurance rate increase, especially when it comes to auto insurance. Some of these include tickets for moving violations or being involved in accidents. The number of insurance claims you make will also have a direct effect on your rates. The more claims you file, the more likely you'll be experiencing an insurance rate increase.

With this in mind, sometimes it may not be worth filing a small claim that would otherwise qualify for payment under your policy. By the time your deductible is paid and you take into consideration a possible rate hike, it may actually cost you money to file a claim.

Assigning Fault

If you file a claim based on damage that's deemed to be your fault, you will likely find your insurance rate increased. If you're not found to be at fault, your rate may or may not increase, depending on your insurer. If you're rear-ended in your car while stopped at a red light – totally not your fault – or the aluminum siding is blown off your house during a wind storm, you shouldn't suffer a rate increase, but this isn't necessarily true. A history of previous claims may cause this last not-your-fault claim to raise your rates.