How much does insurance go up when you make an insurance claim?

Question

I have a property that I put around $15,000 into. I had to evict some tenants, and they stole the bathroom sink, outside awning, destroyed some of the walls and carpets and stole the furnace and hot water heater. It needs a significant amount of work, about $3,000 dollars worth. I have two questions about this.

1) Is this worth making a claim over?

2) How much does insurance go up when you make a claim?

3) Will the insurance for my other properties go up as well, since I'm insured by the same company with all my properties?

Eric H. · Answer

claims may effect your policies in 3 ways and on two different levels.

Each seperate criteria that contributes to your premium is called a Rating Factor (RF), credit, claims history, length of time insured, distance to fire department, etc... As your RFs change over time your non discounted and non surcharged premium will adjust in positive correlation. It's not a 1 to 1 positive correlation as there are tiers of qualification that are based minimum thresholds across multiple factors. Having a claim will move the needle for at least one RF, where this really plays is when that move effects your tiering.

Many policies will offer discounts (2) for being claim free, if you loose this discount your premium may increase. Similarly, having more claims can trigger a surcharge (3) which in addition to a higher base premium and a loss of discounts may significantly impact your net premium.

The next way this claim nay effect you is that your personal claim history becomes useful RF data for ALL your properties even if you switch insurers, which I would not likely do after a claim unless I had to in order to maintain my cash flow or I was non renewed of course.

Ryan Dossey · Answer

This is one of those questions that unfortunately is going to be best left to reading your policies. Typically premiums do rise when a claim is filed. To what extent cannot be predicted with the aforementioned information. Things like length of time without claims, length of time insured, value of properties, type of coverage, and credit score apply.

The decision for me would come down to if I had 3k to spare or not.