When it comes to insurance, there are two parts of the process that aren’t fun: filing claims and paying your premiums. It doesn’t matter what type of insurance you have—car, health, life, homeowners, special assets, whatever—filing a claim is no fun, and neither is paying your policy rates every month or quarter.
That’s certainly true of renters insurance. Renters insurance is one of the more affordable types of insurances available, but it’s still not fun to spend money. And filing a claim just isn’t a good time.
But are they related? Many people who use renters insurance worry that if they have to file a claim (be it for personal property, personal liability, or additional living expenses) it will impact the cost of their renters insurance going forward. But is that actually true, and if so, what can be done about it?
Will your renters’ insurance go up if you file a claim?
The simple answer is a little boring: usually.
Sometimes an insurance company will not raise your rates if you file a claim, but most of the time they will. The reason companies raise your rates is simple: A person who files a renters insurance claim is more likely to file another one. In order to insure that their investment is still good, your insurer will have to raise your rates to account for this.
So why do rates not always increase? Well, for starters, your company might have a no-raise policy, which, truthfully, probably means you’re paying extra to begin with. Or perhaps your policy price already accounted for the fact that, say, you live in an area prone to tornadoes, so a tornado resulting in filing a claim might not increase your rates.
How to find out if your insurance company will raise your rates if you file a claim
Insurance companies use an algorithm to decide what your policy cost is, which means most of them can tell you upfront if certain things will raise the price. So the easiest way to find out if your insurance company will raise your rates following a claim is to simply call your insurance agent and ask them.
Can you switch insurance companies to avoid your rates going up?
It’s always a good idea to shop around for insurance. Even if you like your insurance company, you should shop around and check out competitors every year or so. This will keep companies from taking advantage of you.
With that said, shopping around isn’t likely to help you avoid a price spike following an insurance claim. Insurance is like a credit card: All the companies have access to the same information about you. If you go to a new company for insurance, they’ll still be able to see that you filed a claim, and that will be accounted for in your policy price.
Should you avoid filing a claim to save money?
With more expensive forms of insurance, like health or car insurance, it’s sometimes a smart idea to not file a claim if the cost of the incident won’t exceed your deductible. That way you pay the same amount (assuming you don’t have a second incident that year) without it increasing your policy.
You can try this with renters insurance, but it’s less important, because in all likelihood, a claim will only raise your rates by a few bucks. Your renters insurance will likely go up if you file a claim, but it’s still one of the most affordable types of insurance that you can purchase.