When to File a Home Insurance Claim

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.¹

According to one study, the national average premium increase after filing a homeowners insurance claim is 9%, although this number varies depending on your specific location.²

What About My Premium?

Some insurance companies may protect you against premium increases. However, if filing a claim means your premium will rise, you may need to decide whether it makes sense to do it.

Before filing an insurance claim, consider these key factors to avoid unnecessary costs and higher premiums:

  • Small Claim Amounts May Not Be Worth It
    • If the claim is only $1,000 to $2,000, your deductible may offset most of the benefit.
    • Frequent small claims can lead to long-term premium increases.
  • Your Policy May Not Cover the Loss
    • Always review your insurance policy to confirm coverage before filing.
    • Even an unpaid claim could lead to higher premiums in the future.
  • Recent Claims Can Impact Your Premiums
    • Insurance companies track claims for up to seven years.
    • Multiple claims within this period may result in significant rate hikes.
  • When You Should File a Claim No Matter What
    • If someone is injured on your property, filing a claim can protect you from potential lawsuits.
    • Liability coverage can help shield you from costly legal expenses.

Understanding when to file—and when to skip a claim—can help you save money and keep your premiums low.

  1. Several factors will affect the cost of homeowners insurance, including the location, size, and contents in the home. You should consider the amount of your deductible and level of coverage before purchasing a policy. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
  2. InsuranceQuotes.com, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.