Filing a home insurance claim is never fun, and sometimes, it can lead to an increase in your premiums. But here’s the thing—not all claims affect your rates in the same way. How much (or if) your premium goes up depends on the kind of claim you make and how frequently you file. Let's break it down.
How a claim affects your home insurance rates
When you file a claim, your insurance provider starts seeing you as a bit more of a risk. And as that risk goes up, so can your premiums. How much your premium goes up after a claim depends on a few different factors, like:
- The type of claim
- How extensive the damage is
- Where you live
- Your insurance policy
- Your own claims history
Your home insurance rate can also go up based on how often people in your area are filing claims. For instance, after a big event like a tornado that causes widespread damage in your city or town, your rate might rise more than it would for just a single property damage claim. Typically, you might see a rate increase between 9% and 20% per claim, though the exact amount depends on the type of claim and how many claims you’ve filed before. Insurance companies use your claims history to gauge how likely you are to file again in the future.
So, if you file just one claim within five years, you might see your premiums go up a bit. But keep in mind not every claim will bump up your rates by the same amount. Let's say if you file a second home insurance claim within that five years—you can likely expect an even bigger jump in your home insurance rates. For example, if you file a second weather-related claim, you could see your insurance increase by around 17%, but if you file a second claim related to fire, you could see your insurance jump by up to 60%.
Luckily, some home insurance companies offer first-claim forgiveness. This means that if you make a claim, they won’t raise your premium—at least, not until a second claim comes along. But keep in mind, even if your first claim is "forgiven," it doesn’t just disappear. When you switch to a new insurer, that claim may still follow you and could affect your premium with them.
Why do insurance premiums increase after filing a claim?
Home insurance rates often go up after a claim because your insurer sees you as more likely to file another one down the road. This is especially common with claims related to water damage or theft. To prepare for potential future payouts, your insurer might raise your premium.
That said, whether your rate actually increases after a claim depends on the situation. Some types of claims have a bigger impact on rates than others. Your premium is more likely to go up if you:
- Live in an area with severe weather
- Are in a high-crime neighbourhood
- Have filed liability claims before
- File multiple claims over several years
- Own a home with a history of claims
Yes, you read that right—if you own a home with a history of claims, that can affect your insurance premiums, too. Some insurance providers don’t only look at your claims; they also check out the claims history for your home. This means any claims made on the property—even before you moved in—could affect your premium. Insurers use this info to get a clear sense of the risk involved with both you and your home. Not all companies rate policies this way, but generally, a high number of claims on the property or on your own record could mean higher premiums, a bigger deductible, or possibly even trouble finding coverage with certain insurers.
For how long do home insurance claims impact your insurance rates?
Homeowners insurance claims can impact your premium for five to seven years, but most insurers focus on claims made within the last three to five years. After that period, your premium should start to drop, though it might not go all the way back to your original rate. However, every insurance company handles claim-related rate increases a bit differently, so it’s a good idea to understand the specific rules your home insurance company follows.
Could your insurance premiums not increase after filing a claim?
There are plenty of situations where your property insurance rate can go up after a claim, but there are also times when insurers may not increase your premium. Since insurance is regulated by each province, the rules vary depending on where you live. Here are some cases where insurance companies generally can’t or won't raise your rate:
- If you file your first claim and have claim forgiveness
- If you file a claim that’s denied and doesn’t result in a payout
- If you ask about filing a claim but don’t actually submit one
Most home insurance claims happen because of things beyond the owner’s control. Unlike car insurance, there’s no fault determination with home insurance claims, so even if something wasn’t your fault, filing a claim can still lead to a rate increase. That said, insurers do consider whether an issue is somewhat within the owner’s control. For example, if a fire starts because of old wiring, you might be seen as having had the chance to update it before it became a problem. But something like a tornado or lightning strike is entirely out of your hands. Therefore, claims for weather-related damage might not raise your rates much—or at all. However, if a lot of people in your area file weather claims, rates for everyone in that location could go up.
What factors affect your home insurance premiums?
Home insurance premiums are based on a variety of factors, all aimed at assessing your risk of having a covered loss. Some of the main factors that determine your premium include your home’s location, its replacement cost, the age and construction of your home, how well-maintained your home is, whether it has a pool, its proximity to a fire hydrant or station, and your entire claims history. We will explore each factor in detail below:
Location
Where your home is located plays a big role in determining your insurance premium. Insurers look at claims data for each area, tracking things like the number, types, and costs of claims in your postal code. Higher premiums are more common in places prone to floods, earthquakes, or high crime rates.
Each neighbourhood has its own unique risk profile, and insurers use these stats to gauge the likelihood of future claims. Some companies might even limit the types of coverage available in certain areas.
Replacement cost
Replacement cost plays a big role in setting your home insurance premium—the higher it is, the more you’ll likely pay. This cost is what it would take to rebuild your home exactly as it is, right where it’s located. To calculate this, most insurers use an insurance-to-value tool that looks at factors like your home’s age, construction type, square footage, number of floors, whether the basement is finished, and other specific features. It’s essential to match your coverage to your home’s true replacement value so you don’t end up underinsured if you need to rebuild after a loss.
Age and construction of home
As a home gets older, the risks tied to it tend to increase, which can mean higher insurance premiums. With time, things like wiring or plumbing are more likely to develop issues. Homes that are newer, built with fire-resistant materials, or made of brick usually come with lower premiums. But as the home ages, you’ll likely see those premiums go up.
Well maintained home
Outdated electrical systems can be a fire hazard, and older pipes made of galvanized steel or lead are more likely to crack and leak. That’s why insurers want to know if you’ve updated your electrical and plumbing.
They also look for a well-maintained roof, ideally updated within the last 20 years. If your roof is past its lifespan and starts to leak, your policy might cover interior damage but not the roof repairs themselves. Home insurance isn’t a maintenance plan—you’re still responsible for keeping your home well-maintained and up-to-date.
Pools
Having a pool or hot tub can bump up your home insurance premium because of the added risks, like the chance of drowning, slips, or other injuries. If someone gets hurt and you’re found responsible, legal costs can be significant.
In general, liability claims, like slipping and falling, tend to increase premiums more than property damage claims. A liability claim carries the risk of a lawsuit, which could lead to legal fees and settlements—adding more risk for both you and your insurance company. That’s why it’s important to make sure you have enough liability insurance coverage to help protect you in these situations.
Proximity
If your home is within eight kilometres of a fire station or just 300 meters from a fire hydrant, you could see some savings on your home insurance. Being close means fire services can respond faster in an emergency, which helps limit fire damage and repair costs. The quicker the fire is put out, the lower the cost to restore your home.
Claims history
Filing claims can impact your home insurance premium, but staying claims-free can actually help lower it. Many insurers offer a discount of 10% to 15% on premiums for those without claims. Property claims stay on your record for about five to seven years, but if you go three years or more without filing a claim, you might qualify for a claims-free discount. Staying claims-free can also give you access to more insurance options and choices.
Tips to help prevent filing common home insurance claims
You can’t prevent every disaster from hitting your home, but there are steps you can take to protect yourself and your property to minimize damage. Here are some common hazards that lead to costly claims and tips for how you can prepare your home to avoid needing to file one:
Flooding
While you can’t always prevent natural disasters from causing home flooding, issues like leaky or faulty pipes can lead to just as much water damage—and they’re often more common, especially in homes with basements or crawl spaces. You can help prevent water damage by:
- Keeping gutters and downspouts clean
- Fixing any leaking or cracked pipes
- Checking the seals around tubs and sinks
- Using water leak detectors and automatic shut-off valves to catch leaks early
- Having a plumber inspect your pipes and plumbing system regularly
- Adding sewer backup and overland flooding coverage to your home insurance policy for extra protection
You can also install a sump pump to help remove any water building up in the basement of your home. Water can get into your basement through perimeter drains in a waterproofing system, or if your basement sits below the water table, groundwater can seep in after heavy rain. A sump pump helps by moving that water away from your house and directing it to a safe spot like a municipal storm drain or a dry well.
Fire damage
A house fire is one of the toughest things anyone can experience. While not all fires can be prevented, there are steps you can take to reduce the risk, like:
- Updating old wiring and replacing any faulty wiring
- Installing smoke and carbon monoxide detectors and testing them regularly
- Keeping fire extinguishers accessible in key areas
- Cleaning lint from dryers and air filters
- Keeping electrical devices away from anything flammable
- Avoiding overloading electrical outlets
- Never leaving ovens, chimneys or wood stoves unattended while in use
Taking these precautions can make a big difference in keeping your home safe. By implementing these precautions, you can significantly enhance the safety and security of your home, providing peace of mind and protection against potential risks.
Theft and vandalism
Theft and vandalism don’t just come with a price tag—they can also leave you feeling vulnerable and shaken. But you can strengthen your home’s security and make it less appealing to potential intruders by:
- Installing home security cameras
- Adding motion-sensing lights outside
- Setting up an alarm system
- Deadbolting all exterior doors, even while at home
- Avoiding keeping a hidden spare key outside
- Avoiding sharing expensive purchases or upcoming vacations on social media
While you can’t guarantee that no one will ever try to break in or damage your home, these steps make it much less likely. Intruders and vandals are less likely to target a home with visible security measures. Protect yourself and your family by putting these safeguards in place.
Sewer backups
Sewer backups are becoming more common, especially with so many basements now being used as living spaces. If not dealt with quickly, they can cause serious water damage and even lead to mould growth.
A big thing is making sure you have backwater valves installed. These are a great way to keep sewage or wastewater from backing up into your basement. Normally, water flows out of your home through the pipes. But if the municipal sewage or stormwater system gets overloaded, it can push wastewater back through your drains. When that happens, the backwater valve closes automatically to block the flow and protect your home. They’re especially helpful in homes with fixtures or drains installed below ground level, like in basements. Other things you can do to prevent sewer backups include:
- Avoiding pouring grease down your drain
- Avoiding flushing non-disposable items
- Avoiding planting trees with invasive roots close to your home
- Scheduling regular inspections and cleanings for your sewer lines
Wind and hail damage
With storms on the rise, wind and hail damage are becoming more common, often hitting roofs, windows, and siding and leading to costly repairs. While you can’t avoid all weather-related damage, you can help minimize it by:
- Regularly checking your roof and fixing or replacing damaged shingles
- Trimming nearby trees and branches to prevent them from falling on your home during storms
- Securing outdoor furniture or personal property that could become a projectile in high winds
- Installing storm shutters or impact-resistant windows
- Keeping your home’s siding in good shape to better withstand rough weather
How to lower home insurance rates
While filing a claim can lead to an increase in insurance rates, it doesn't necessarily mean you have to be stuck with high insurance coverage. Below, we’ve put together a list of some of our top tips for saving money on home insurance premiums:
Bundling your insurance
You can save right away by bundling your home insurance with another policy—whether it’s coverage for a second home, auto insurance, or even commercial insurance. Bundling home and auto policies, for example, can lead to significant savings.
Reviewing your coverage
It’s easy to just let your home insurance renew automatically, but that might not be the best move—especially if your needs have changed. That’s why it’s a good idea to check in with a broker each year before your policy renews. They can help you review your coverage and suggest ways to save, like raising your deductible or adjusting your coverage options.
Increasing your deductible
And speaking of deductibles, the deductible you choose plays a big role in your home insurance costs. Generally, the higher your deductible, the lower your premium will be.
Paying your premiums annually
If your insurance company adds fees for monthly payments, consider paying your policy in full upfront to avoid those extra charges.
Installing a home security system
Setting up a security system, monitored alarm, or burglar alarm in your home is a great way to save on home insurance. Talk to your insurance provider about the requirements to qualify for a discount, and ask for more home security tips while you’re at it.
Adding a sump pump
If you’re worried about flood damage, think about getting a sewer backup prevention device or a sump pump. Both can help reduce the risk of serious water damage and might even qualify you for a discount on your home insurance.
Learn more today with BrokerLink
How much your insurance may increase after filing a home insurance claim will vary depending on several factors. To learn more about how a claim might affect your premiums, reach out to BrokerLink today. A BrokerLink insurance advisor would be happy to review your policy and help you understand how your claim could affect your insurance premiums. If you have specific questions about what your home insurance covers, like whether home insurance covers pest control, mould, appliances, and more, our advisors are ready to help.
You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.
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FAQs on the increase in home insurance premiums after a claim
Does home insurance cover water damage claims?
Whether your home insurance covers water damage claims depends on your insurance coverage. Generally, water damage has to result from something sudden or accidental, like a burst pipe. However, actual flooding or sewer backups are typically not covered by standard home insurance—you would have to add these specific coverages to your policy for additional protection.
Does home insurance cover winter claims?
Whether your home insurance covers winter claims depends on the cause of the damage and your insurance coverage. For example, if the winter claim is for a burst frozen pipe, the damage is most often covered by home insurance. However, if the burst pipe occurs while the home is left vacant for the winter, it may not be covered, depending on how long they've been away. If you are planning on leaving your home vacant for a period of time, be sure to let your insurance company or broker know.
Does home insurance cover appliance claims?
In some cases, your home insurance will cover appliances in your home, but only if the damage is caused by a specific event listed in your policy, like fire or theft. Most policies—whether it’s homeowners, condo, or tenant insurance—won’t cover damage from wear and tear or manufacturer defects.
If you have any questions, contact one of our local branches.
