Will a Homeowners Insurance Claim Denial Raise Your Premiums? (2024)

FAQs

Will a Homeowners Insurance Claim Denial Raise Your Premiums? ›

Generally, a homeowners insurance claim denial should not directly impact your premiums. When your insurer determines your premium, they consider several factors, such as the age of your home, the value of your possessions, and the likelihood of a claim being filed.

Despite not being settled and paid out, having this on your claims history could hurt you in the future and result in higher premiums for years.

Even a denied claim may raise your rates because the accident that resulted in the claim put a negative mark your driving record. Your driving record and claims history are both factors when it comes to setting your insurance rates.

You may need to resubmit the claim or file an appeal more than once to reverse a company's decision, but don't give up. Your persistence can demonstrate to the insurance company that you are serious about resolving the problem and getting paid.

If your insurer nonrenewed or cancelled your policy because your house needs repairs or you filed too many claims, you may have difficulty finding an insurance company willing to insure your home.

If something happens to your home, it's worth thinking about whether you could afford to cover the cost yourself instead of claiming on your home insurance. This can protect your no-claims discount and help to avoid an unnecessary rise in your premiums.

File an appeal

Filing a formal appeal triggers a review of your denied claim. Include with your appeal as much evidence and documentation as you can to support the position that your damages should be covered.

How much does insurance go up after a claim? A single claim can raise your rates an average of 28%, according to one major insurer, but different claims are weighted differently, so a minor fender bender may not increase your premium the way a major at-fault accident might. How long do accidents stay on insurance?

A quick way to reduce your premium is to raise your homeowners insurance deductible, the amount you pay if you have to make a claim. If you have a $1,000 deductible, you could save an average of nearly 13% a year by increasing it to $2,500, according to NerdWallet's rate analysis.

Another factor that determines your home insurance rates is your likelihood of filing a claim. Insurers view claims related to theft, water damage, and liability as more likely to be repeated than others, so they'll often increase premiums after just one of these claims due to that higher risk.

What are home insurance premiums based on? ›

Some are personal factors, like your claims history. In states that allow it, credit history may also be used as a rating factor. Other factors are related to your home, like the ZIP code, year it was built, square footage, general condition and your property's proximity to a fire station, to name a few.

Age of the home: Buying homeowners insurance for a 100-year-old house is very different from buying insurance for a house less than 40 years old. Homeowners insurance rates are likely higher for older homes or for homes in need of repair.

Location The geographical location of your home is perhaps one of the most significant factors influencing your insurance premium. Insurance companies consider various aspects of your location, including weather risks, crime rates, and proximity to emergency services like fire stations.

Another reason your dwelling coverage might be higher than the sale price is if the home is in an undesirable area, which lowered the market value. Certain homes that are older may also yield higher dwelling coverage.

Under California law, an insurer cannot increase your premiums when you aren't at fault.

That said, you'll usually be looking at an increase of 20%-50%. Unless it's protected, you should also expect to lose any no-claims discount you've built up. Even if it's protected you could still see your premiums rise – this is because a no-claims discount is a reduction from a baseline car insurance premium.

There is no set number of claims that will result in an insurance company dropping you from a home insurance policy. The decision to drop a policyholder is typically based on the frequency and severity of claims, the type of claims filed and the overall risk profile of the policyholder.