You pay for insurance, so all of your claims should be paid, right? But should you even be filing the claim in the first place? Just calling and making an inquiry about a potential claim might impact your premium.

We all know that insurance can be a difficult industry to understand. Actuaries and underwriters focus on data analysis, taking the human factor out of claims. Should you have an incident, it’s a good idea to talk with your agent before filing a claim.

Filing a Claim Can Impact Your Premium

When you file a claim, whether it’s a small one or a catastrophic loss, you are likely to see your premium increased. According to one study, a single claim may result in your monthly premium being raised by 9%, and a second claim might result in a premium increase of 20% – in some cases, it could even double. Liability claims, such as from personal injuries, can lead to your insurer raising premiums by an average of 14%.

Some carriers will see you as high risk if you file multiple claims, and the worst-case scenario could lead to your policy being canceled. If you get canceled for filing claims, will need to find someone willing to offer you insurance with your particular claims history. This means you’d have to pay higher premiums and other fees, be insured by a carrier in the Surplus Lines Market, which can be hard to find without an agent who understands these challenges.

Claims Databases

Most insurance claims are recorded in one or both of two databases: CLUE (Comprehensive Loss Underwriting Exchange) and A-PLUS (Automobile-Property Loss Underwriting Service).

CLUE tracks seven years’ worth of your auto and property insurance claims, as well as any inquiries you may have made about a claim. These databases report your claims history to all insurers, and they look to this information to determine whether to cover you and how much to charge.

Some states have taken steps to restrict the type of information that may be found in these databases, such as whether inquiries are counted as claims.

How Do You Protect Yourself?

Here are some ways to help keep your homeowner’s insurance costs down:

  • Don’t make small claims. Your agent can help you decide if it’s worth it to file a claim. It helps to get a few hundred dollars to cover a small incident, but the long-term ramifications might not be worth it.
  • Do use insurance for catastrophic repairs. Don’t use insurance for maintenance items. Your agent will be happy to help you sort out the most effective use of your policy.
  • Raise your deductible. Your agent will probably recommend you go with the biggest deductible you can afford, but not so high that you can’t afford to pay out-of-pocket costs if damage occurs.
  • Shop around when you’re up for renewal. Contact your agent for help in finding the best policy for your needs. That’s what we’re here for.