Homeowners insurance protects your home and other personal properties when they’re damaged or destroyed in a covered loss. You can receive reimbursement after a loss by filing a home insurance claim. Claims can remain on your record for between five and seven years (duration depends on your insurance company); this may include claims filed by someone previously living in the home. It could reflect on your record if it was filed within that five to seven-year duration.
A homeowners' claim can influence your insurance in multiple ways, including inflated rates and exclusion from coverage. When you’re applying for a fresh homeowners insurance policy, your rates will be influenced by your claim history and likelihood to file a claim.
An applicant may also be denied coverage altogether if an insurance company that's more risk-averse establishes that the applicant has previously filed multiple claims. Here are some fundamental things to know about how long do homeowners insurance claims stay on your record and how it’ll affect your home insurance rates.
A homeowners' claim can influence your insurance in multiple ways, including inflated rates and exclusion from coverage. When you’re applying for a fresh homeowners insurance policy, your rates will be influenced by your claim history and likelihood to file a claim.
An applicant may also be denied coverage altogether if an insurance company that's more risk-averse establishes that the applicant has previously filed multiple claims. Here are some fundamental things to know about how long do homeowners insurance claims stay on your record and how it’ll affect your home insurance rates.
How Long Does A Home Insurance Claim Stay On Your Claims Record?
Most home insurance claims reflect on your record anywhere between five and seven years; however, the exact duration depends on the company pulling your claims history. This duration can also be determined by the damage type reported. Claims filed by the previous homeowners may also be included in the history if they've lived in the home within this duration.
Most companies, during your home insurance application, will access your claims history over the last five years through a database like the CLUE (Comprehensive Loss Underwriting Exchange). Based on the data derived from your CLUE report, your rates may be set higher or coverage denied altogether.
For claims filed by previous homeowners within the duration, an insurer may consider the nature of such previous claims in ranking your home or area as a higher risk for specific loss types and charge you a higher premium. Furthermore, if your data shows an extensive claims history, insurers may also charge higher premiums since there's a likelihood you'll be consistent with such a pattern.
Most companies, during your home insurance application, will access your claims history over the last five years through a database like the CLUE (Comprehensive Loss Underwriting Exchange). Based on the data derived from your CLUE report, your rates may be set higher or coverage denied altogether.
For claims filed by previous homeowners within the duration, an insurer may consider the nature of such previous claims in ranking your home or area as a higher risk for specific loss types and charge you a higher premium. Furthermore, if your data shows an extensive claims history, insurers may also charge higher premiums since there's a likelihood you'll be consistent with such a pattern.
Do home insurance claims influence your current insurance?
A single claim could take between a few days and months to settle, depending on the damage type. However, a settled claim can continuously influence your insurance rates down the years, resulting in increased rates and exclusion from certain discounts.
The damage type reported is also significant – all losses don’t affect your insurance equally. “High penalty” claims like water damage, fire, theft, liability, and dog bite claims are more likely to increase your rates; while “Low penalty” claims resulting from extreme but rare weather damages (wind, hurricane, hail, lightning, and freezing) are less likely to impact your premium.
Your insurers may notify you that rates are increasing after you file a claim or you may discover at renewal that your rates have gone up for the next policy term. This is particularly likely if you’ve filed several claims. Multiple filed claims may also make you ineligible for claims-free discounts.
The damage type reported is also significant – all losses don’t affect your insurance equally. “High penalty” claims like water damage, fire, theft, liability, and dog bite claims are more likely to increase your rates; while “Low penalty” claims resulting from extreme but rare weather damages (wind, hurricane, hail, lightning, and freezing) are less likely to impact your premium.
Your insurers may notify you that rates are increasing after you file a claim or you may discover at renewal that your rates have gone up for the next policy term. This is particularly likely if you’ve filed several claims. Multiple filed claims may also make you ineligible for claims-free discounts.
Keeping your premiums from sky-rocketing after a filed claim
Claims aren’t worth filing if the difference between the cost of repair for the covered loss and your deductible is close or insignificant. So let’s say a piping unit at a section of your home is damaged and the estimated repair cost is $950 but your home insurance deductible is $1000, your insurers will only cover the insignificant difference of $50. This isn’t worth the potential impact on your claims record.
However, home insurance policies are in place to service such damages, and a claim filing can be often unavoidable. If your rates increase after a claim, or you discover at renewal that your premium has increased, it isn't such a bad time to review your home insurance coverage. You may find companies who are willing to offer you an identical coverage at a much lower rate, even with a stacked-up claims record.
However, home insurance policies are in place to service such damages, and a claim filing can be often unavoidable. If your rates increase after a claim, or you discover at renewal that your premium has increased, it isn't such a bad time to review your home insurance coverage. You may find companies who are willing to offer you an identical coverage at a much lower rate, even with a stacked-up claims record.