Claims vs Premium Impact

Filing a claim is supposed to be simple—your home gets damaged, you report it, and insurance pays. But the moment that claim hits your record, your premium changes. Insurers track every claim you file for years, and they use that history to decide how risky you are. This is why some claims are worth filing and others are financial landmines.

If you’re unsure how coverage actually works, review homeowners coverage basics so you know what qualifies as a legitimate claim.

1. Claims Stay on Your Record for 5–7 Years

Insurers use a national database called CLUE (Comprehensive Loss Underwriting Exchange). Every claim you file—or sometimes even just report—is logged in that system.

• Most claims stay visible for 5 years
• Water damage claims may influence rates for 7 years
• Multiple claims can trigger non-renewal

Even if you switch insurers, the new one sees your record instantly.

2. Not All Claims Impact Premiums the Same Way

Some claims hit your premium lightly. Others hit like a sledgehammer.

• Water damage — biggest premium spike; highest risk
• Fire — major jump; long-term impact
• Wind/hail — moderate impact if region-wide
• Theft — small to moderate increase
• Liability — varies; can be severe

Water claims do the most long-term damage. If you don’t understand why, read loss of use basics—water claims usually involve displacement, mitigation, and large repair costs.

3. Claims Can Trigger Higher Deductibles

After certain types of claims—especially wind, hail, and water—insurers may adjust your deductible at renewal.

• Percentage deductibles replace flat deductibles
• Wind/hail often get their own special deductible
• Higher deductibles shift more cost back onto you

This is why understanding deductible basics matters before filing anything.

4. Small Claims Can Cost More Than They Pay

A $2,500 claim may raise your premium by $300–$500 a year for five years. That’s a $1,500–$2,500 hit—more than the payout itself.

• Cosmetic damage
• Minor theft losses
• Small water leaks you can repair yourself

Filing a small claim often puts you in a worse financial position long-term.

5. Multiple Claims in Three Years Is a Red Flag

Insurers don’t just look at claim types—they look at frequency.

• Two claims in three years = high-risk homeowner
• Three claims in three years = likely non-renewal
• One water claim + one theft claim = considered high risk

If you’re at risk of non-renewal, read why insurers cancel or refuse renewals.

6. When You Should File the Claim

File when the damage is severe or dangerous:

• Structural damage
• Major water intrusion
• Fire or smoke damage
• Storm damage that compromises safety
• Liability incidents involving injury

These claims justify the premium increase—they’re too expensive to handle alone.

7. When You Should Not File

Skip the claim if:

• The cost is close to or below your deductible
• The damage is cosmetic
• You already filed a recent claim
• The fix is cheap and you want to avoid a rate hike

Insurance protects you from disasters—not wear and tear or minor fixes.