Will my premium go up if I file an insurance claim?

Insurance Q&A: “Will my premium go up if I file a claim?”

Short answer: Yes and no. Every claim is different and the details of your particular claim will dictate whether or not your insurance premium will go up and by how much?

Different states have different rules as well, so be sure to seek state specific advice if you have a potential claim.

It’s also important to know what to do if your insurance company decides to non-renew your insurance policy as a result of an insurance claim.

Be sure to note that your policy cannot be cancelled simply for filing a claim.

When a Claim Won’t Increase Your Premium

The whole idea of insurance is that “stuff” happens, many times independent of how much precaution we take to protect our property.

It’s why accidents are called accidents and not “purposes.”

That said; there are some claims insurers are not “allowed” to charge you for. Namely, claims that are considered “acts of God.”

Examples would be a wind or hail storm. We have zero control over where and when the next tornado or hail storm will occur. All the preparation and worry in the world will not save influence Mother Nature.

When a Claim Will Increase Your Premium

Liability claims, those in which you are found negligent for the cause of bodily injury or property damage to another, will likely increase your insurance premiums in all cases.

This may be an at-fault accident on your car insurance, or a “slip and fall” on your property, which would be covered by your homeowners insurance.

When it comes to property damage to your own vehicle and/or home, your premium may or may not go up depending on the circumstances.

For example, you may file a claim for hail damage to your vehicle on your auto’s comprehensive coverage and see a rate increase.

When it comes to home insurance, some states will charge for property damage claims, such as water damage resulting from a broken water heater that spews multiple gallons of water on your floor. However, as discussed above, some states do not charge for any property damage claims. (For more information, read our “My Car Was Broken Into, Can I File a Claim?“).

Note: Don’t feel obligated to write us and disagree with information on this post unless you hold a license in and are familiar with Department of Insurance Statutes in all 50 states. Every state is different and the state in which you reside may be different than others.

How much will my premium go up if I file a claim?

Unfortunately, there is no short answer for this one. How much your premium will increase depends on a couple of things. The type of insurer you are currently with and the type of claim are the two main factors…although it can be said your age and history with your company may play a role in the increase as well.

Your driving record and whether you’re at fault for the accident are also some of the factors that may affect your premium after a claim.

If you are with a standard or preferred carrier (they don’t typically insure people with claims), you can expect to pay a hefty increase for your insurance.

Additionally, if you file a minor claim (dollar wise) versus a major claim, your premium increase may not be as much, maybe a few hundred or less. There’s a difference between a minor fender bender in an accident and an accident in which a vehicle is totalled. The cost and severity of a claim are key factors in determining whether your insurance premiums will increase.

The younger (or older) you are when you file a claim, the more you can expect to pay for your insurance.

If you have driven accident free for 15 years and file a claim, the insurance company may not see you as a higher risk.

However, if you file a claim 10 months after receiving your license, the insurers will determine you are much more risky to insure and charge you much more upon renewal.

[Learn more: How car insurance rates are determined.]

Could accident forgiveness could save you?

If you’ve been with your company for a long time or have purchased accident forgiveness (not recommended by most agents) you may see no increase at all.

Basically, you opt for the insurance coverage and for an additional premium, your insurer will “forgive” an accident (or two) during your policy term.

There are a couple of schools of thought regarding this coverage. One is, you are already purchasing insurance to protect you against an unforeseen event (accident), so why pay more money to be “forgiven.”

The flip side of that coin is accident forgiveness may cost less to pay for on a monthly basis than what you’d end up paying with an auto accident on your record for up to five years.

How long will my premium be higher if I file a claim?

Typically, auto insurance companies don’t concern themselves with insurance claims filed over three years ago…from a pricing standpoint.

Many insurers on the other hand, may count claims against you from an “underwriting acceptability” standpoint for as many as five years.

For example, if you file one claim per year for five straight years, your insurer will likely increase your premium as a result of the three most recent and no longer charge you additional premium for the first two, but may decide you are ineligible for a policy as a result of having a total of five.

Read more: What happens if you file multiple car insurance claims at the same time?

What can I do to lower my premium?

Another simple answer; shop online for insurance quotes or contact a local independent agent (captive vs independent insurance agent).

This is your best avenue for finding a better deal on your insurance. It is not uncommon for individuals to save money on insurance after switching insurers…even with a ticket or claim.

The national insurance companies with large television advertising budgets don’t usually have the best prices. They rely on bombarding us with commercials and other advertising to convince us they are the best option.

How do you think they pay for an advertisement to be run at every commercial break on every channel 24 hours per day? They’re using your premium dollars to do so…