You might have heard that filing a home insurance claim will make your insurance rates go up. And maybe it doesn’t seem quite fair – the whole reason that you have insurance is to use it when you need it. And the thing is that while your Atlanta home insurance will protect you from financial loss, it’s important to understand the effect that certain claims could have on your Georgia home insurance rates. It’s not a given that a home insurance claim will make your rates go up, but it’s also not a given that it won’t. We’ll explain about how claims can affect your home insurance rates.
Will filing a claim make my home insurance rates go up?
A 2014 study from InsuranceQuotes.com examined the effect of filing claims on home insurance rates. They broke it down state by state. And they found that, on average, filing a claim could raise Georgia home insurance rates by about 8-10%. Of course, that’s not a guarantee – it’s not like any claim causes an automatic 10% increase in your rates. It really depends on the type of claim it is, how big a claim it was, and whether or not you file claims frequently. For example, if you’re filing your first claim and it’s from a weather-related loss that you had no control over, you might not see an increase. But if you’re filing two or three claims in a short time, you might have a bit more trouble.
What kind of home insurance claims will make your rates go up?
Usually, claims that are related to liability could cause your rates to rise. For example, if your dog bites someone, that would be a liability-related claim. (Dog bite claims can be very expensive, which is why some insurers have a “dangerous dog list” of breeds that they won’t insure.) Another example is slip-and-fall claims, meaning that someone fell on your property and got hurt because of a hazard. This kind of claim can cause your premiums to increase. It could also cause your coverage to get nonrenewed.
Water-damage claims also might cause a rate increase. While insurance covers certain types of water damage, insurers get a bit concerned because of the potential for mold. Mold is not cheap to fix. Anyways, if you have a water-damage claim that’s pretty minor, you might want to consider taking care of it on your own if you’re financially able to do so. Insurance companies see “water damage” and immediately think – mold.
Burglary or vandalism.
If your home is burglarized or vandalized, your rates could go up because you could face another loss in the future. Insurance companies tend to view crime as risk, and if your potential for crime is high, your rates could reflect that. Be sure to take steps to protect your Atlanta home from burglary.
What’s a CLUE report and why does it matter to my rates?
But wait – how do insurance companies know what claims you’ve made and when?
Your CLUE report comes from the Comprehensive Loss Underwriting Exchange, which is a database of home insurance-related information that insurance companies can access. A CLUE report is essentially a record of all the claims you’ve made – it gives your name, the address where the loss occurred, what the loss is, and the amount the insurance company paid out. Your CLUE report goes back about seven years, and if your insurance company looks at your report and decides you’ve had too many claims, they could decide not to renew your insurance or raise your rates.
There’s no hiding the fact that you’ve made claims. It’s right there in the CLUE.
How can you keep your home insurance rates from going up?
Now, it’s probably best not to have your home insurance rates rise at all. Though there’s no guarantee that your rates won’t ever go up when your renewal rolls around, there are a few things you can do to keep your rates down.
1. Try not to file minor claims.
Try to reserve your home insurance for major catastrophes that you can’t cover on your own. If there’s minor damage to your home from a storm or another loss, you might want to consider taking care of it on your own and paying out of pocket rather than filing a claim. Yes, your insurance is there to help you when you need it. But you might not want to use it for every minor thing – if you do, you risk making your rates go up.
2. Consider your deductible.
Your deductible is the amount of money that you agree to pay if you have a claim. You pay your deductible and your insurance covers the rest of the claim. You probably don’t want to file a claim that’s close in value to your deductible because you’ll still have to pay your deductible – insurance would only cover a small portion of the claim anyway, and then you’ve got that home insurance claim on your record.
Let’s say your deductible is $750. You have a home insurance claim for $1,100. Yes, you could file the claim and insurance would pay the $350 that’s left after you pay the deductible. But is it really worth filing that claim when you already have to pay $750 anyway? At that point, it might just be more prudent to take care of the entire claim on your own.
3. Check your CLUE report.
Your CLUE report, as we mentioned earlier, gives a history of your claims – and possibly even claims inquiries. If you’re concerned that your claims history isn’t looking too great, get a copy of your CLUE report and check for any mistakes that could be hurting your rates. If you find any, politely ask for them to be corrected.
4. Really think about filing that second claim.
You might want to give some real thought to filing that second claim if you’re worried that your coverage could be renewed or your rates could go up. Remember, filing too many claims could lead to that outcome. So, take out your calculator and think about your finances and if it’s worth filing a claim based on your deductible.
If you face a loss and there’s damage to your home, you’ll have to decide whether or not to file a home insurance claim. There are many reasons that your rates could go up at renewal time, and it is possible that your rates could go up if you have lots of claims or a really large claim. So, it’s important to really consider when filing a home insurance claim. However, that’s not to say that you shouldn’t use your insurance when you need it – that’s what it’s there for, after all.
Do you want to save money on home insurance in Atlanta? We can help. Our agents are experts at helping homeowners shop for their rates and get the coverage that they need at a great price. All you have to do to get Atlanta insurance quotes is fill out our online form or give us a call today.