By insuring your home, an insurance company assumes financial risk. However, when you file a claim for a covered loss, the insurer must meet its financial obligation by paying what it legally owes. According to the Insurance Information Institute, between 2014 and 2018, U.S. insurers paid nearly $13.7 billion, just in property damage claims. You purchase homeowners’ insurance to cover losses when disaster strikes. Still, when you file a claim, the provider may consider you a higher risk and more likely to file more shares in the future. When that happens, the carrier may increase your insurance premium. Therefore, if you can afford to pay out of pocket for minor losses, you can avoid a potentially costly increase. The severity of claim and frequency of claim history
for both the home and insured play a role in potential rate increases.