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3 months ago · by · 0 comments

Will my home insurance go up if I make a claim?

Filing a home insurance claim may affect your insurance premium. However, your premiums may go higher depends on the type of claim you make, such as your claim history and your property assessments. There are possible chances that your premium rates may rise after a claim and, in any instance, that you made a liability claim previously. Homeowners’ insurance does not entirely depend on your history claims; they also depend on your property’s location and the risk of disaster.

Will my home insurance go up if I make a claim?

Filing a home insurance claim may affect your insurance premium. However, your premiums may go higher depends on the type of claim you make, such as your claim history and your property assessments. There are possible chances that your premium rates may rise after a claim and, in any instance, that you made a liability claim previously. Homeowners’ insurance does not entirely depend on your history claims; they also depend on your property’s location and the risk of disaster.

How much premium does a Home Insurance increase after a claim?

Homeowners’ insurance increases a premium after a claim depending on the type of claim and the claim history. On the event, you’ll file a claim for liability, which is often in a significant amount of dollars could raise your rates much higher more than a single amount of dwelling. However, insurance premiums may also increase if you file multiple nonliability claims in the past. Premiums also change by the number of claims due to your surroundings, and the risk of weather events.

Homeowners’ premium rises due to policyholders that file a claim previously has more chances to submit an additional claim more often in the future. Determining your homeowners’ insurance premiums are more likely to increase much higher after a claim such as;

  • History of liability claims
  • Properties that consists history of multiple claims
  • More than a single claim over time
  • Claims that show your property in a high-crime location
  • Filed claims that are experiencing frequent severe weather

Why do Premiums of Home insurance increases after a liability claim?

Making a single claim on a damaged covered by your dwelling or other coverage, liability claim is more likely the cause that can result in a much higher home insurance premiums. Liability claims can be a significant impact on your insurance premiums as they often involve a significant amount of money and litigation. Some instances, filing multiple liability claims may lead the policyholder to have a hard time renewing their homeowner’s insurance policies.

Why do Premiums of Home insurance increase after multiple claims?

Filing multiple claims can cause much higher premiums, due to insurers will calculate that you have higher chances of filing a claim in the future. Your insurance premium may increase if you file multiple claims in just a short period.  Determining the premium is not only by the claims you file as an individual, but it also includes the history of claims by the previous occupants.

Why do Premiums of Home insurance increases after weather-related claims?

You may receive much higher premiums for your homeowners’ insurance if you have claims history that that concludes that your property experiences often severe weather and can experience more in the future.

When to file a claim

It’s essential to understand in filing a claim to compare the cost to your deductible. For instance, the cost of the claim is lower than your deductible. It’s better to cover the value out of pocket. It is a fact that you might want to consider, especially if it is not the first time filing a claim. In an instance, a claim is lower than your deductible; it is recommended not to file the claim. However, if the claim is related in liability cases and the third party will sue you, you should let your insurance provider know and cover it for you. On the other hand, if you want a lower premium after filing a claim, consider getting a higher deductible to lessen your premium rate.

Things you need to know in filing a claim

The first thing you need to do in filing a homeowner’s insurance claim is to make a list for all the damages. Also, make a document, photograph all the losses, and submit it to your insurance provider to defend your claim. Most insurance providers will send an insurance adjuster to specify the cost of the damages. The insurance adjuster will assess and decide whether your insurance provider will cover the cost and how much will be the reimbursement. However, proving that the damages did not cause in your negligence, your insurance provider will typically evaluate the damages and reimburse you according to your policy agreement.

What does your homeowners’ insurance generally cover?

Homeowners’ insurance typically covers;

  • The dwelling
  • Personal property
  • Other structures
  • Liability (Bodily Injury and Property damage)

Dwelling coverage

Dwelling is one of the standard coverages that homeowners’ insurance policy does provide. It covers the structure of your home, where you live. It also includes other structures that are attached to your homes, such as a garage or a deck.

Other structures coverage

Homeowners’ insurance policy also covers other structures that are inside your property but separate from your home, such as; detached garage, fence, or a tool shed.

Personal property coverage

Homeowners’ insurance does not only provide coverage for the damages for your home but also covers your personal belongings inside your house. Personal property coverage will help you cover the repair and replace your damaged personal property that is damaged by a named- peril.

Liability coverage

Typically, homeowners’ insurance policy provides liability coverage; in an instance, a visitor is injured while inside your property. Your homeowners’ insurance liability coverage for bodily injury may help you cover medical expenses and legal costs if you are found legally responsible.

What is Actual Cash Value and Replacement Cost?

Actual cash value and replacement cost are methods that insurance providers use to calculate the amount to be paid after a loss.

Replacement Cost – is the value of an asset that you have to pay to replace an asset equivalent at the present market value.

For example, you bought a Laptop cost of $1,000, which you have used for one year, but one day when you got home, the laptop is lost. The amount of that laptop after the year you bought it is already $1,200 in the present market value. Your insurance provider will pay for the $1,200 as the replacement cost value regardless of the depreciation.

Actual Cash Value – is the present market value of an asset minus the depreciation of the damages or lost item at the time of the loss.

For example, you bought a laptop cost of $1,000 and has a useful life for ten years; however, it was lost, and you consume using it for five years. The laptop is now a cost of  $1,200 in today’s market value.  To calculate the amount the insurance provider will replace is

$1, 200 (Market Value) –  x 50%(Depreciation) = $600 is the amount which the insurance provider will pay as the actual cash value.

What type of claims are not covered in homeowners’ insurance?

Homeowners’ insurance policy also has exclusions that the coverage doesn’t cover at the time of a claim. These are some exclusions that your policy won’t cover.

Personal Injury

Homeowners’ insurance policies provide liability coverage for an injury or property damage that may occur in your property that may result in an injury to the third party. Liability coverage of homeowners’ policy covers the medical expenses and repair for the damages to the third party. However, homeowners’ policy does not cover personal injury to the policyholder.

Earthquake Damage

Damages caused by an earthquake is usually excluded from homeowners’ insurance policy. On the other hand, earthquake insurance can be purchase through private companies that are members of the California Earthquake Authority (CEA). Additionally, you cannot purchase your earthquake insurance to CEA; you must purchase through insurance providers member of CEA.

Flood Damage

Damages due to floods are usually excluded from homeowners’ insurance policy. However, a flood insurance policy can be purchase to insurance providers participating in the Federal National Flood Insurance Program (NFIP).

Why homeowners’ insurance is essential?

The primary goal of purchasing homeowners’ insurance is to protect the policyholder in absolute financial risk. Try to think of it? Is it a significant loss in your part to pay a small ceratin fee for an insurance company today, that will provide you protection against the unexpected. For instance, you have this beautiful home of yours with no insurance coverage, a fire occurs and burn out the entire house, are you ready to recover everything in just a snap? Homeowners’ insurance Los Angeles will help you find the right coverage and the most affordable insurance rates! Get a Free Quote today to compare rates!

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