Will My Home Insurance Go Up if I Make a Claim?
Caeva O'Callaghan | March 31st, 2020
You should only make a claim when you really need it. But will claiming affect your Home Insurance policy in the future? Be aware of the facts, as you could end up paying extra.
In short: yes. Costs could rise significantly, so it’s not worth claiming on your home insurance policy unless the cost of an incident is substantially above the excess. It’ll also cost you your no claims bonus.
Making a claim on your home insurance is a decision that shouldn’t be taken lightly. Making a claim could impact your ability to get insurance with another provider, and cost you more each month.
In this article, we’ll cover topics like:
- Will I pay more for home insurance if I make a claim?
- How will making a claim affect my home insurance?
- What will happen to my no claims bonus if I make a claim on my home insurance?
Many small-scale disasters can be handled quickly and easily at home, without getting insurance involved. This is better for everyone, as time and money isn’t tied up in processing your claim. However, if the incident is large, the whole point of having insurance is so that it’s there for you when you need it.
Making a claim
If you’ve been burgled, the first thing to do is phone the Garda. You’ll need a crime reference number to make an insurance policy claim.
Next, ring your insurer and tell them you want to make a claim. They’ll walk you through the process, and inform you of anything you need to know before you proceed. Before you start, it’s a good idea to gather receipts, take photos and collect any other evidence that will support your claim.
If fire, flood, break-in or any other event has damaged your home, make sure your insurer signs off on the work required before getting it done.
Your insurance provider will let you know how making a claim will affect your premium down the road.
How claims affect your premium
Statistically, people who make an insurance claim are more likely to make one in future. It’s proved by nationally gathered data, which insurers rely on to calculate insurance risk. This is why your premium goes up after you make a claim.
There are many reasons why this is. If you claim on your insurance to repair flood damage to your house, for example, it’s likely you live in an area prone to flooding. Your insurer is just protecting their interests in the event another disaster should strike.
These factors, and your insurance provider, will determine how much your premium rises. A general rule is that if you’re in doubt whether to make a claim, just ask your provider if it’s worth it. They won’t lead you down the garden path, as it’s best for everyone to be rational about it.
If your insurance won’t pay substantially more than you could out of your own pocket, it generally isn’t worth it. You’ll need to cover the costs of repairing your home or replacing lost items, as well as the excess.
Your no claims bonus
Insurers want you to stay safe first of all. But they also don’t want to spend any money on expensive claims. So, to reward you for being safe, they’ll give you a discount. This discount applies if you don’t make a claim within your first year of a policy. This is called a no claims bonus.
The value of your NCB can vary from insurer to insurer. It generally starts at 10% to 15% for a one year no-claims bonus. It will then increase with each additional claim-free year. This means mature policies can save you a whopping 40%. That’s an awful lot to lose if you make a claim.
Compared to car insurance, the increase on your home insurance when you lose your NCB will be small. This is because home insurance premiums are smaller and the maximum no claims bonus on home insurance policies is only 25%. For cars it is 55%.
Any claim – big or small – will wipe out your no claims bonus. This will mean paying more a year for the same cover, so think carefully before you make a claim.
Not only do claims have a serious impact on your current policy, they will likely affect home insurance you take out moving forward.
Whenever you take out a new policy or renew your old one, your insurer will ask you if you’ve claimed on home insurance before. It’s in your best interest to be transparent with your provider, as inaccurate information could lead to your policy being cancelled. Insurance providers need to know if you’ve claimed in the past because it affects your risk of claiming in the future.
You’ll most likely pay more for your new premium if you’ve made a claim in the past. If you have to claim for flood damage, for example, your insurer will ask you to pay more because they now know the risk to your home is real.
This is why making a claim should only be done in dire circumstances. Insurance is there to take care of you should the worst happens – but make sure it’s truly the worst before you proceed.
If you are unsure about anything to do with making a claim, please call us in QuoteMe.ie
If you are in doubt or unsure of anything to do with making a claim, feel free to pick up the phone to us and we can help you with any query you might have. Our trained home insurance experts have been helping our customers for over 30 years when it comes to processing claims. We have seen all eventualities and will guide you accordingly. You can call us directly, between 8.30am and 5.30pm each weekday on 0818 224433 or 042 9359051.
If you would like a home insurance quote online you can go directly to our Quote Engine and compare home insurance in the Irish market from 12 insurance providers to get you the right cover for your specific circumstances. We look forward to hearing from you.