Will our homeowners insurance rates go up if my husband and I incur a loss?

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Asked January 16, 2012

1 Answer


A total home loss is a large claim to file, and doing so will remain in your insurance record for years. But being part of your financial history, which it is, does not necessarily mean that you are going to be charged higher rates. There are other factors which need to be considered, including how often you have filed home insurance claims and for what amounts, your credit score, and perils faced in your region are also important factors. Yes, it is possible that your rates will increase, but not entirely because of a single claim, even a total loss.

If you have a history of claims against your homeowners insurance policy, whether they are total losses or only minor claims, the risk to insure you will increase. This is a good reason why it is sometimes better to pay for minor damages out of pocket without filing a claim at all, to maintain a low number of claims. If the cost of a possible claim is within your financial budget to pay for yourself, the long term savings in insurance costs could means the difference of far more money.

Keep your credit score up, and that will help offset any possible increase in potential risk. Insurance companies use your credit score to determine your financial stability, and a higher score translates into a more financially safe policy for the insurance company, a savings that is passed on to you as a discount.

If you live in an area that has been struck by a major catastrophe such as an earthquake, tornado or hurricane, you may find that the general cost of local insurance has increased, and some insurers could stop providing home insurance at all. In this instance, your rates would go up, not specifically because of your own risk but because of the general risk of insuring homes in your area.

Answered January 16, 2012 by Anonymous

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