Will a Water Damage Claim Raise My Rates?

11/10/2021 (Permalink)

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Is A Water Damage Claim Going To Increase My Insurance Rates?

If you suffered from a home flood recently, you may be worried about making an insurance claim. Will reporting the issue cause your rates to increase? Read on to learn what you need to know.

The Claim Category is Important

As it turns out, there are certain types of claims that are more likely to cause your premiums to increase than others. These include:

• Mold
• Dog bites
• Slip-and-fall matters
• Water damage

Although water-related destruction is on this list, do not get discouraged. If you were not at fault, you are more likely to be safe from a rate hike than if you were to blame.

Severity Matters

The extent of the damage is also of importance when making an insurance claim. If the damage is contained to a small area, you will likely see only a minor rate increase or none at all. If the issue is complex, you may have to start making higher payments on your policy.

Rate Hikes Vary

If you do get an increased insurance rate, it may not be as large as you think. The average rate is usually raised by about 20 to 40 percent, depending on the insurance provider. As mentioned above, your premium increase is also based on how bad the damage is, who was at fault and what occurred.

Hikes Are Not Forever

If your rate goes up, it should not be permanent. Even the strictest of companies rarely increase premiums for longer than five years, and some only go up for two years. If you lose coverage, your only option may be to find high-risk insurance, which can be very expensive for most Chino Valley, AZ, homeowners.

The best way to understand if filing an insurance claim is right for you is reviewing your insurance policy. If this is your first claim and the company typically forgives those, reporting the water damage is probably a wise decision. If the damage is widespread and will be costly to fix, filing a claim may be your only option. Weighing the pros and cons and reviewing the information above will help you to be better prepared to make the right financial decision.