Filing a homeowners insurance claim can make finding affordable coverage more difficult. A previous claim may affect the price insurers offer, and in some situations it can influence whether an insurer is willing to write a new policy. Insurance companies can use claims history when determining premiums and deciding what policies to offer.
However, having one claim doesn’t necessarily mean you have to stay with your current insurer or accept the first quote you receive.
Why Does a Previous Claim Affect Insurance?
Insurance companies consider previous claims because they use claims history as one factor in evaluating risk. Specialty insurance reporting agencies collect information about homeowners insurance claims, and insurers may use these reports when determining pricing and eligibility.
The impact can depend on factors such as:
- Type of claim
- Date of the claim
- Amount paid
- Number of previous claims
- Location of the property
- Condition and age of the home
- Current insurance market conditions
- Your insurer’s underwriting rules
A water-damage claim, for example, may be evaluated differently from a theft or fire claim.
Compare Several Insurance Companies
After a claim, shopping around becomes particularly important because different insurers can evaluate the same claims history differently.
The Consumer Financial Protection Bureau recommends contacting several companies and comparing quotes, coverage amounts, and deductibles.
When requesting quotes, provide the same information to each insurer so you’re comparing similar policies.
Don’t focus exclusively on the lowest premium. Compare:
- Dwelling coverage
- Personal property coverage
- Liability limits
- Deductibles
- Replacement-cost coverage
- Additional living expenses
- Water backup coverage
- Exclusions
- Available discounts
Check Your Claims History
Before applying with multiple insurers, consider reviewing your insurance claims report.
For example, LexisNexis C.L.U.E. reports can contain up to seven years of homeowners and personal-property claims information and may be used in insurance underwriting. The CFPB says consumers can request one free C.L.U.E. report every 12 months.
Review the information carefully. If you discover inaccurate or incomplete information, you can request corrections.
This can be particularly useful if an insurer quotes you a surprisingly high premium or declines coverage based on information you believe is incorrect.
Ask About Claim-Free Discounts
Some insurers offer discounts to homeowners who have gone without claims for a specified period.
If you’ve recently had a claim, you may not qualify immediately, but ask each insurer how its claim history affects available discounts and when you could become eligible again.
Consider Increasing Your Deductible
A higher deductible can sometimes reduce your homeowners insurance premium. However, you should only choose a deductible you could comfortably afford if another covered loss occurs.
Remember that some policies may have separate deductibles for certain types of disasters, so read the policy carefully before choosing a higher deductible.
Improve the Property Before Reapplying
If your previous claim was related to a problem with the property, correcting the underlying issue may help demonstrate that the risk has been addressed.
Depending on the situation, improvements might include:
- Replacing an aging roof
- Repairing plumbing
- Updating electrical systems
- Installing leak-detection equipment
- Adding smoke or fire alarms
- Improving security
- Addressing drainage problems
Keep receipts, inspection reports, photographs, and permits for completed improvements.
Don’t Automatically Switch After a Claim
If your current insurer is willing to continue covering your home, compare its renewal offer with quotes from other companies before making a change.
Switching insurers doesn’t automatically erase your previous claims history. Insurance companies can obtain claims information through specialty reporting agencies, so the claim may still be visible when you apply elsewhere.
Consider an Independent Insurance Agent
An independent agent may be able to obtain quotes from multiple insurers rather than representing only one company.
This can be useful if your claim history makes it difficult to find competitive coverage through standard online quotes.
For homeowners who have multiple claims, an unusual property, or difficulty obtaining coverage, asking an agent about available alternatives may be worthwhile.
What If You’re Denied Coverage?
If an insurer declines your application because of information in a consumer report, federal consumer-reporting rules provide certain rights. The CFPB explains that an adverse action notice should identify the consumer reporting agency used by the insurer, allowing you to obtain the relevant report and dispute inaccurate information.
Don’t assume that one rejection means every insurer will reject you.
Final Thoughts
The best approach to finding homeowners insurance after a claim is to compare multiple insurers while carefully matching coverage and deductibles.
Start by reviewing your claims history, correcting any inaccurate information, and obtaining several quotes. Then compare the actual protection offered rather than choosing solely based on the lowest premium.
Your previous claim may affect your insurance options, but its impact can change over time. Maintaining the property, preventing repeat losses, and maintaining a good insurance history can help improve your options as you continue shopping for coverage.
