Are Prior Claims Influencing Your Home Insurance Costs?
Indeed, having lodged recent claims on your home insurance is likely to result in an increase in your premium upon renewal.
The frequency of your claims correlates directly with the rise in premiums since insurers perceive greater risk. Nonetheless, other factors also play a role in elevating costs.
For instance, a surge in weather-related claims throughout the year could lead to heightened premiums for all policyholders. Additionally, relocating to a new address might impact your policy's price due to varying risk factors associated with the new location.
Typically, individuals with a history of fewer or no claims enjoy lower home insurance premiums. Therefore, it's prudent to evaluate the necessity of making a claim carefully.
Key Insights:
- Making home insurance claims tends to raise future premiums due to increased risk perception by insurers.
- It's imperative to disclose any previous claims when applying for home insurance to avoid policy invalidation.
- Claims history remains on the Claims and Underwriting Exchange (CUE) database for six years.
How Much Does Home Insurance Rise After a Prior Claim?
Recent statistics from Go.Compare illustrate how the number of claims affects the cost of home insurance for customers.
| Number of Previous Claims | Median Home Insurance Cost |
|---|---|
| None | £183 |
| One | £285 |
| Two | £365 |
| Three | £410 |
| Four | £454 |
Is Disclosure of Prior Claims Mandatory?
Absolutely, transparency is crucial when applying for home insurance. Failure to do so jeopardizes your policy's validity, potentially resulting in claim rejections.
Do Insurers Investigate Previous Claims?
Insurers often scrutinize your claims history during the quotation process, especially if recent claims are evident. Moreover, they verify this information when you file a claim. Inaccurate disclosures may lead to claim denial.
Sharing of Claims History by Insurers
Most insurers exchange information via the Claims and Underwriting Exchange (CUE) to assess risks accurately and determine appropriate premiums.
How to Review Home Insurance Claims History
You can request a breakdown of your claims history from your current or former insurer. Alternatively, you may submit a subject access request form to the Motor Insurers’ Bureau (MIB) for information stored on the CUE database.
Existence of an Insurance Database for Home Insurance
Yes, the CUE database consolidates information on reported incidents, encompassing home, car, and personal injury insurance.
Treatment of Unclaimed Incidents
Incidents reported to insurers but not pursued as claims are still recorded and may influence future premium calculations.
Claims Attribution
In home insurance, most payouts stem from incidents not attributed to the policyholder's fault. However, even claims unrelated to fault contribute to the claims history record.
Duration of Claims Record
Claims history remains on the CUE database for six years, facilitating fair pricing and minimizing payouts for fraudulent claims.
Considerations for Claiming on Home Insurance
Evaluate whether you could cover the cost of home-related incidents independently to safeguard your no-claims discount and prevent unwarranted premium hikes. Always disclose prior claims to maintain coverage validity, and explore alternative providers if facing increased premiums.
FAQ's
What types of previous claims can increase the price of home insurance the most?
Flood claims are likely to increase the cost of your premiums the most. That’s because if you live in an area that’s previously flooded, it’s more likely to happen again and result in further flood claims.
Similarly, weather-related claims are also likely to bump up the cost because the effects of climate change are expected to make extreme weather more common.
Can I get home insurance with a claims history if I’ve been declined by my insurer?
Yes, it should still be possible to find cover elsewhere as different providers have different underwriting thresholds. Depending on the situation, you might find it easier to get cover through an insurer that specialises in covering your circumstances.
And if you’re finding it difficult to get cover after making a claim for flooding, you might qualify for the Flood Re scheme which can help you find an affordable insurer.
Can I switch home insurance companies while I’m making a claim?
Yes, it’s still possible to switch and this should not affect your claim being processed by your current insurer. But if you change providers, you’ll need to disclose information about any previous or outstanding claims. Failing to do this is likely to invalidate your cover and could mean the provider refuses to pay out if you need to make a claim in the future.
Can I avoid my home insurance premium increasing after making a claim?
Whether your premiums will increase largely depends on the size of your claim. But one way to help reduce the cost of cover is to shop around when your policy’s due for renewal. Although you might still need to pay more than you did previously, it could be cheaper to switch to a different provider.
How can I minimise home insurance premium increases after making a claim?
Although you’re likely to see a price rise after making a claim, doing some or all of the following steps can help to make your premiums cheaper:
- Improve your home’s security – Installing insurer-approved door and window locks, alarm systems and CCTV can help to reduce the cost of your cover.
- Increase your voluntary excess – The higher the excess you choose to pay, the less your cover will cost. Just be sure it’s an amount you could afford to cover comfortably.
- Pay annually – Paying a one-off annual premium usually costs less than paying monthly instalments.
- Avoid overinsuring – Take time to find out your home’s rebuild value and estimate the value of your contents accurately, so you do not end up paying for more cover than you need.
- Buy a combined policy – It’s usually cheaper to buy contents and buildings insurance from one provider than it is to take them out as separate policies.
- Build up your no-claims bonus – Avoid making any further claims in the next few years (where possible) to help build up a no-claims discount.
Should I avoid making a claim on my insurance to keep my premium price low?
This largely depends on the cost of your claim. If it’s an amount you could afford to cover yourself, you might be better off not claiming rather than risking a jump in premiums. Plus, it can help to protect any no-claims discount you’ve built up, which can get you a better price when it comes to renewing your cover