There was a fire in my kitchen. Will my homeowners insurance increase if I submit a claim?
UPDATED: May 1, 2012
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Asked May 1, 2012
Filing a single claim, even for something as potentially serious as a kitchen fire, will not cause your rates to go up automatically. You may see a slight increase for other reasons, as we will explain, but your insurance is designed to pay claims during the course of the policy and your rates will only go up if a pattern of filing claims begins to emerge, not just in your home policy but across any liability policies you may have.
Homeowners insurance is meant to protect the value of the property it covers, including the home, other structures on the same piece of land, your personal property and liability if damages or injuries occur. To do that, some claims have to be filed in order to maintain the property value, and a kitchen fire is one such claim. By repairing your kitchen, the insurance company brings the value of the home back up to what is covered in the policy.
What you should know is that every claim you file, whether it is for your home, your car, health insurance, or any other policy, will be added to your CLUE report. When you buy or renew an insurance policy, the issuing company will review your CLUE report and base your premiums, in part, on what it contains. That means that the more claims you file, the higher the risk of insuring you and the higher your rates will be.
But if your kitchen fire is the only claim you have filed, you won't have anything to worry about. You may lose a few points or discounts based on not filing any claims previously, but your premiums will not increase because of a single claim. However, if the cost of repairs is only slightly higher than your deductible, it might make more economic sense to go ahead and pay for the repairs out of pocket, keeping the incident off your CLUE report and minimizing the impact on your insurance premiums across the board.
If you do see your rates increase, you may want to review homeowners insurance quotes from other companeis that may provide cheaper insurance.
Answered May 1, 2012 by Anonymous