Key takeaways
- Insurance claims indicate a higher risk for future claim and can leader to higher insurance rates for both homeowners and drivers.
- Policyholders should weigh the cost of repairs against their deductible before filing a claim.
- Filing too many claims can result in higher premiums and potential policy cancellation.
From car accidents to kitchen fires, insurance is there to help you recover from financial setbacks caused by covered perils. However, this help can come with some hefty strings attached. After an auto, home or renters insurance claim is processed, insurance companies can determine that you or your property are more risky to insure. This can result in policyholders getting hit with higher rates when their policy is renewed. Understanding why your rate changes can help you decide if filing a claim is the best option when a loss occurs.
What is an insurance claim?
An insurance claim is a formal request submitted to an insurance company for financial compensation when unforeseen losses or damage occurs. For a claim to be approved, the event that caused the loss must be considered a covered peril. Events that are excluded or are not covered by the policy are denied without payment.
The process of filing a claim is similar across auto, home and renters insurance policies, and claims generally fall into one of two categories: first-party and third-party. First-party claims are when you, the policyholder, file a claim against your policy for your own loss. A third-party claim is when another person files a claim against your policy for damage or loss your negligence may have inflicted upon them. While auto, home and renters insurance are different insurance products, they all have coverage types for first and third-party losses.
Why do insurance claims affect your rates?
The price of your home or auto insurance is based on risk — specifically, the risk that you’ll file a claim, which will cost your insurance company money. Before you file any claims, that risk calculation is based on rating factors like age, location and in most states, credit score. Once you file a claim, the risk of another claim increases, as can your insurance rate. Policyholders who frequently file claims, regardless of the claim amount, run the risk of policy cancelation.
Auto insurance claim
Not all auto claims have the same impact on your car insurance rates. When a driver is at fault for an accident, insurers usually apply a surcharge to the policy, which typically creates a sharp rate increase for an average of three years. Drivers may also experience a rate increase from losing accident-free or safe driver discounts.
One at-fault car accident can increase full coverage car insurance rates by 45 percent. However, the rate increase can vary depending on the situation, carrier and state. For example, a car accident resulting from slick roads may have a lower surcharge attached than one involving speeding and an undisclosed driver.
Drivers can also file a comprehensive claim for losses such as fire, theft, hail or flood. Since these claims are considered not-at-fault, rates usually do not increase. If they do, it is typically slight and doesn’t have a surcharge attached. Below outlines how getting into an at-fault accident raises your insurance above the national average cost of car insurance. While not directly tied to filing an accident claim, the cost difference can give you an idea of the severity of increase compared to having no claims or incidents.
| Avg. cost of full coverage car insurance | Avg. cost of minimum coverage car insurance | |
|---|---|---|
| No claims | $2,685 | $800 |
| After one at-fault accident claim | $3,884 | $1,174 |
| Percent differance | 45% | 47% |
| *Based on Bankrate’s analysis of Quadrant Information Services rate data, April 2025 |
Homeowners insurance claim
A homeowners insurance policy is broken up into two parts. Section I covers property damage (your home), and Section II provides liability coverage (damage to others). Both types of homeowner insurance claims can cause rate increases, but again, it depends on the type of claim and the risk of a similar claim occurring. According to the Insurance Information Institute’s (Triple-I) 2022 data, the most recent available, 97.8 percent of home claims are for property damage and 2.1 percent are for liability claims.
Carriers use a home’s location and susceptibility to natural hazards as a significant rating factor. Another factor is the home’s prior claim history, which can show insurance companies the likelihood of filing a similar claim. Your home insurance rate may increase based on the amount of claim payout and the likelihood of subsequent claims. For example, water damage from your child flushing their toy down the toilet may have a high claim payout, but not a high risk of re-occurrence. Whereas a wildfire claim has a high payout and a high risk of happening again.
Insurance rates after a liability claim typically increase since they are only paid out when the homeowner is negligent. While you can’t stop a wildfire from destroying your home, claims like dog bites are viewed differently.
The national average cost of home insurance before a claim is $2,267 for $300,000 in dwelling coverage. Below shows how home insurance rates can increase after different types of claims.
| Type of claim | Dollar amount of claim payout | Avg. annual rate after claim | Percent increase |
|---|---|---|---|
| Fire | $80,000 | $2,397 | 6% |
| Liability | $31,000 | $2,399 | 6% |
| Theft | $5,000 | $2,414 | 6% |
| Wind | $12,000 | $2,392 | 6% |
| *Based on Bankrate’s analysis of Quadrant Information Services rate data, April 2025 |
Renters insurance
Since renters insurance only covers your personal property and liability, it is much cheaper than a homeowners insurance policy. However, that also means that any rate change due to a claim is more noticeable.
Similar to home insurance, rates can increase for a renters policy once a claim is filed due to the risk associated with future losses. Also, since renters don’t own the property they live in, they don’t have the ability to take the substantial preventative measures that may be needed to avoid future losses. According to Triple-I, the average cost of renters is insurance is $170 per year or $14 per month.
Statistically speaking, some dog breeds are more likely to cause harm to your guests than others, including but not limited to pit bulls, German shepherds, Great Danes and Dobermanns. A dog bite claim in your past is likely to have a significant impact. Some carriers may disqualify you, while others may limit liability. Regardless, you’ll likely have a higher-than-average premium.
What are high-risk claims?
While high-risk claim isn’t a formal industry term, some policyholders fall into high-risk categories for various reasons and, as a result, pay much higher insurance rates.
For auto insurance, high-risk drivers are those with multiple moving violations or accidents on their driving histories. You can also be deemed a risky driver if you have had even a single DUI or have a poor credit history in a state that uses insurance-based credit scores in their modeling. These behaviors indicate to insurance carriers that you are more likely to file claims with higher payout amounts. Getting quotes through a non-standard carrier may be a good way for high-risk drivers to find more affordable insurance rates.
For high-risk homeowners and renters, carriers are concerned with loss-prone locations. This would include areas prone to frequent and expensive losses from high winds, wildfires and vandalism. However, any home can be deemed high-risk for any of the following reasons:
- Age and condition of the home make it more susceptible to damage
- Vacant or unoccupied homes
- Aggressive dog breeds
- Attractive nuisance, such as a trampoline or swimming pool
- Home constructed from outdated materials
- Home with a rebuilding cost beyond the carrier’s risk tolerance
Should you avoid filing a claim to prevent rate changes?
It depends. If the cost to repair damage to your car or house doesn’t significantly exceed your insurance deductible, it may be a better long-term financial decision to defer the claim and pay out of pocket.
However, car accidents that cause injuries or property damage to other parties should be reported to the insurance company immediately, even if the other party wants to “keep insurance out of it.” Failure to report an accident — or to stay at the scene of an accident — can be a significant legal misstep and could cause your insurance premium to go up.
Regardless of whether you file a claim, you’ll still want to collect the other driver’s information and report the incident to your provider if the other party files against you. In this scenario, it’s recommended that you gather evidence from eyewitnesses and obtain the police report to solidify your side of the story and protect yourself from potential rate hikes.
Can you save on your insurance after a claim?
Insurance claims can cause your insurance rate to increase for a temporary amount of time, typically three to five years. However, there are still ways that home and car owners alike can save during this probationary period:
- Raise the deductible : Your deductible is the amount you pay for a claim before your insurance company starts chipping in. As a result, your provider will typically trade you a lower premium for a higher deductible.
- Use discounts : Even if you have a claim(s) against your record, you can still qualify for home and auto discounts. From bundling to paperless billing, your insurance agent will gladly discuss your savings opportunities — because more often than not, these discounts benefit both you and them.
- Increase security: Investing in a home security system or storing your car in a more secure location like a garage may be rewarded with insurance savings, considering these actions should reduce claims.
- Drive safely: You may be able to get your insurance rate back in check by avoiding accidents and traffic tickets for multiple years in a row.
Frequently asked questions
Methodology
Auto rates
Bankrate utilizes Quadrant Information Services to analyze April 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually. Bundling and paperless billing discounts are applied.
These are sample rates and should only be used for comparative purposes. Your quotes will differ.
If otherwise specified, the base profile has been modified with the following driver characteristics:
Home rates
Bankrate utilizes Quadrant Information Services to analyze April 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates for our base profile are based on married male and female homeowners with a clean claim history, good credit and the following coverage limits:
- Coverage A, Dwelling: $300,000
- Coverage B, Other Structures: $30,000
- Coverage C, Personal Property: $150,000
- Coverage D, Loss of Use: $60,000
- Coverage E, Liability: $500,000
- Coverage F, Medical Payments: $1,000
The homeowners also have a $1,000 deductible, a $500 hail deductible and a 2 percent hurricane deductible (or the next closest deductible amounts that are available) where separate deductibles apply.
These are sample rates and should be used for comparative purposes only. Your quotes will differ.
If otherwise specified, the base profile has been modified with the following homeowner characteristics:
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