A Home Insurance Claim -- to file or not to file?

| June 27, 2019
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Insurance is meant to protect you against financial loss. But is it really meant to protect you from any and all financial loss? When it comes to filing a loss claim on your home insurance, there may be times when not filing may be the wisest course of action.

According to one 2018 study by the National Association of Realtors, filing just a single claim could increase your monthly premium by 20%, depending on where you live.

What About My Premium? Yes, you may see your policy surcharged for the claim. Each carrier is different but normally anything over $500 could be surcharged at your next renewal. And you may lose a loss-free discount. Insurance companies are starting to introduce an endorsement forgiving a claim. A Loss Forgiveness endorsement may protect you against premium increases. But if you don't have this endorsement or the carrier does not offer it, it means your premium can rise with a claim, so you may need to decide whether it makes sense to file a claim.

It may not pay to file a claim when:

  • The claim amount is small. Your policy will have a deductible, so even claims of $1,000 to $2,000 may not have a favorable long-term cost benefit.
  • You're not covered for a loss. Read your policy first to determine coverage. The simple act of filing a claim (even for a claim that won't be paid) may result in higher premiums.
  • You have filed a claim within the last seven years. Since previous claims are tracked by an industry database for seven years, it may result in higher premiums.

Another factor to consider is if someone was injured on your property. Regardless of the dollar amount of damaged property, if someone is injured on your property, it's best to file a claim in order to protect yourself in the event that you are sued by the injured party. 

For information on the claims process and what to expect, check out our Claims Advocacy page. 

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