A Home Insurance Claim: To File Or Not To File

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 claim on your home insurance, there may be times when not filing is the wisest course of action.

According to a 2019 study by the National Association of Realtors, filing just a single claim could increase your monthly premium by 20 percent, depending on where you live.

What About My Premium?

Some insurance companies may protect you against premium increases. However, if filing a claim means your premium will rise, you may need to decide whether it makes sense to do it.

It may not pay to file a claim if:

  • 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.