There are several factors that contribute to an increase in the cost of your homeowner’s insurance premium. One such factor is filing a damage claim against your policy. While it is in the best interests of homeowners to file damage claims for fire, flood, hail, storm, or wind damage, and theft, you need to consider the future impact on your premium. So, the question remains. Do homeowner’s insurance premiums increase when you file a damage claim against your policy?
What You need to know
The cold, hard truth is that your homeowner’s insurance premium will probably increase if you file a claim, even if it’s the first one. According to CNN, the average homeowner’s premiums increase at a rate of 9% per year. Furthermore, if you file a second claim within a time period (like 7 years), you can expect an increase of as much as 20%. Additionally, the size of the claim usually doesn’t affect how much the cost of your premium will increase. So, whether your claim is $5,000 or $100,000, it only matters that you filed a claim. However, the type of claim that gets filed will make a difference.
If you’re wondering how your homeowner’s premium will be affected, the answer could be complex. Claims for theft and vandalism as well as catastrophic storms and natural disasters can cause dramatic increases in premiums. If thousands of claims and lawsuits arise because damages total in the millions or billions, this could impact every policy holder’s premiums. This is attributed to how they define higher risk areas and the need to recuperate what they’ve paid out in claims.
So, if you live in an area of Florida that is commonly impacted by a catastrophic storm or natural disaster and you never file a claim, the cost of your premium could still increase. Remember, coverages are written based on the historical information that was used to predict the number of potential damage claims. Furthermore, increases in premium costs varies from one state to the next since regulations are typically handled on a state-by-state basis.
In some instances, a homeowner and their insurer won’t be able to agree on the amount of a damage claim settlement. There are several reasons this including:
- The denial of a claim
- Too low of a settlement amount
- Disagreeing on what is covered in the policy
If you find yourself in a situation where you and your insurance adjuster have reached an impasse over a settlement amount, we advise that you contact a home insurance lawyer for legal advice. Our experienced lawyers specialize in property insurance law and have the resources to pursue legal action on your behalf. For more information, call Korin Law P.A. today.