Insurance Read Time: 3 min

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 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, the national average premium increase after filing a homeowners insurance claim is 9%, although this number varies depending on your specific location.2

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.

1. Several factors will affect the cost of homeowners insurance, including the location, size, and contents in the home. You should consider the amount of your deductible and level of coverage before purchasing a policy. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
2. InsuranceQuotes.com, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |

Have A Question About This Topic?

Thank you! Oops!

Related Content

Tax-Advantaged Health Care Planning for Retirement

Tax-Advantaged Health Care Planning for Retirement

Heading into retirement with confidence is easier if your planning includes steps to minimize taxes, especially as it relates to health care planning.

Extended Care: A Patchwork of Possibilities

Extended Care: A Patchwork of Possibilities

What is your plan for health care during retirement?

12 Steps to Living: Horizon, Risk Tolerance, and Compounding

12 Steps to Living: Horizon, Risk Tolerance, and Compounding

Understand the concepts of horizon, compounding, and risk tolerance, and create an investment plan.