Past claims have a significant impact on how much you pay for your home insurance. If you’ve had to claim for flood damage, for example, you’ll probably be asked to pay more when you renew your policy, because your insurer knows the risk to your home is real.
Fortunately, there are ways to keep costs down.
How do previous claims affect the cost of home insurance?
Insurers set prices according to risk, so they will charge you more for cover if they think you’re more likely to make a claim and cost them money.
Your risk profile is visible to insurers when you make a claim, so if you’ve had to make claims in the past for whatever reason, this tells the insurer that your property is a greater risk than someone who hasn’t – even if what happened was no fault of your own.
When your policy comes up for renewal, your insurer will substantially increase your premium.
How can I avoid claims making home insurance more expensive?
Insurers do not reward loyalty, so the best way to get value for money on home insurance is to compare policies and shop around.
Making a claim does not affect your right to look for better offers elsewhere. You may even find you can pay less for the same cover.
Do I have to tell home insurance companies about previous claims?
Yes, it’s really important to be completely up-front about previous home insurance claims.
You could otherwise invalidate your new policy – meaning any claims you have to make will be refused, should your new insurer discover you’d hidden what happened.
Certain claims – including subsidence – will mean you have to choose from a smaller pool of insurers.
How do flood claims affect the cost of home insurance?
Making a flood claim will push up the cost of your home insurance.
MoneySuperMarket figures from June 2019 show that consumers whose home hasn’t been flooded before pay an average of £96 a year for a home insurance policy – compared with £199 for those who have made flood claims.
However, a government and insurance industry scheme called Flood Re is helping keep insurance costs down for those living in high-risk areas.
It also caps the excess you have to pay towards a claim at £250.
How can I stop my home insurance going up after a flood claim?
If you live in a flood-prone area, you are likely to have to pay more for home insurance – especially if you have made a flood claim in the past.
You can keep costs down by taking steps to avoid further claims, such as signing up for free flood warnings from the government. You could also flood-proof your home by upgrading your wiring and drainage system, and having a plan to save your valuables when you receive a flood warning.
How can I avoid my home insurance going up after a burglary?
Claiming on your home insurance due to a burglary will probably mean you have to pay more for cover in the future.
You should install additional security equipment such as alarms and cameras to make your home harder to break into and less attractive to thieves.