House Insurance Claims That Will Increase Your Premiums

Getting home insurance offers you peace of mind because you know if your home gets destroyed or damaged, the insurance company will compensate you for the loss. However, most people often wonder if their homeowner’s insurance cost will go up after making a claim. That is why some homeowners hesitate before making a claim, as they are unsure how it will affect their policy rates in the future. One important thing to remember is that the more claims you file, the more expensive your premiums are likely to be. Even if you move to a different house, your history of making claims will still affect you. Although claims are not the same, here are a few types of claims that will cause your premiums to go up.

Liability Claims

If someone gets injured at your home or their property gets damaged, this is where your policy’s liability aspect comes in handy. It will help cover the rising medical expenses or the cost to repair or replace the damaged item, therefore, affecting your premiums. However, if the resulting expenses are not so huge and it will not dent your wallet if you cover them, you might want to avoid making a claim.

Fire Claims

Your home might catch a fire, which results in the house being damaged, whether partially or entirely. Filing a claim like this will significantly impact your insurance rates. Property damage coverage will help you replace your items or repair what has been damaged, depending on the terms of your homeowners policy. However, after that, your premiums are likely to increase. You may want to consider installing a smoke detector as well when purchasing home insurance, as that helps reduce your insurance cost by a certain percentage.

Theft Claims

If thieves break into your home and steal property resulting in you filing a claim, your insurer will increase your premiums. However, you might want to reconsider filing a claim if they did not get away with many things. For instance, if the thief only managed to get away with a laptop or phone, you can easily replace those items instead of filing a claim. However, you can also talk to an insurance agent in such situations and discuss how installing a security system in your home can offset any increase in the premiums.

Vandalism Claim

Vandalism is also a common source of property. When your home is vandalized and you file a claim, your premiums are also likely to increase. Filing a claim like this indicates that you might not be in a safe neighborhood, meaning that the issue will likely occur again. That is why, most times, it might be advisable if you install a security system. However, if the damage to the vandalized property is not that significant, consider repairing it from out of pocket.

Water Damage Claim

Water damage claim is one of the biggest claims made in Canada, and most homeowners insurance policies generally cover damages resulting from an internal water issue. Therefore, damage caused by water entering your home through doors and windows is not covered in this scenario. Before purchasing this type of insurance, first, talk to an insurance agent and confirm your policy limits to know if you are getting sufficient coverage.

Hail Claim

Hailstorms can cause significant damage to your roof, requiring you to file a claim with the insurance body. However, to repair that damage in most cases, you will not need to replace the roof completely. Contact a roofing expert to assess the damage before you file a claim. You might find that the damage is minor, and repairing it will not cost you much, preventing your premiums from increasing.

Wind Claim

Strong winds can also cause damage to your home and, if they are strong enough, even uproot the roof. If the damage is severe, you will have to file a claim with your company to cover those damages. However, after that, your premiums will also increase.

Home insurance policies are meant to help a homeowner recover when exposed to risks. Therefore, it would make sense that every time you suffer a loss, you file a claim. However, you also have to factor in how filing that claim affects your premium and whether it is worth it. If the damage is minor and you can comfortably cover the loss from your pocket, do so to avoid an increase in your premiums.

Why Do Claims Increase Your Home Insurance Premium?

When an insurance company insures your home, they take on financial risk. And when you file a claim, the company will meet its financial obligations and cover the loss just as stated in a standard home insurance policy. Insurance companies pay huge amounts of money every year just on home insurance claims alone. However, every time you file a claim, your insurance organization considers you a higher risk with more chances of filing other claims in the future. That is why your insurance carrier is likely to increase your insurance premium.

Ways You Can Reduce Your Home Insurance Premium

Shop Around

When shopping for home insurance, contact a licensed agent or broker to find a suitable policy for you. In Ontario, any insurance company and agents must be licensed by the Financial Services Commission of Ontario. You can check the site to see if the company or agent you want to work with is listed. When shopping, get and compare different homeowners insurance quotes and see which one is affordable and suits your needs.

Increase your Deductible

If you increase your deductible, your premiums will go down. For instance, if your current deductible is $1,000, you should consider raising it to $1,500. However, keep in mind that you will also have to pay more in the event of a loss when you file a claim.

Do Not File Small Claims

Not filing claims is a great way to get a discount on home insurance premiums. Therefore, if the claim is minor, it is better not to file it as your insurance cost will decrease in the following years. However, when a loss is too significant, where a fire has caused severe damage, file the claim. Your dwelling coverage will ensure you are compensated for the loss suffered.

Improve Home Security

Installing things like smoke detectors, deadbolt locks, alarm systems, and CCTV cameras will help your premiums go down as they help reduce the risk of a loss occurring.

Homeowners insurance coverage is essential as it protects your home from various losses. On the other hand, filing a claim will affect your premiums. If you can comfortably pay for minor losses, you can avoid such increases. You can also talk to an insurance expert like, especially if you are unsure whether to file a claim or not.

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