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, filing just a single claim could increase your monthly premium by 20%, depending on where you live.²
What About My Premium?
Some insurance companies may protect you against premium increases, and in Texas insurance companies are prohibited from increasing rates following a first claim. However, if it means your premium will rise, you may need to decide whether it makes sense to file a claim.
It may not pay to file a claim when:
- The claim amount is small. Your policy will have a deductible, so even claims of $1,000 to $2,000 may not have a favorable long-term cost benefit.
- You’re not covered for a loss. Read your policy first to determine coverage. The simple act of filing a claim (even for a claim that won’t be paid) may result in higher premiums.
- You have filed a claim within the last seven years. Since previous claims are tracked by an industry database for seven years, it may result in higher premiums.
Another factor to consider: you may want to file a claim regardless of dollar amount if someone is injured on your property in order to protect yourself in the event that you are sued by the injured party.
