When shopping for homeowners’ insurance, you may encounter challenges if you’ve made a claim in the past, especially within the last five years. Many insurance carriers are increasingly cautious about offering policies to homeowners with recent claims on their record, and some may outright refuse to provide a quote if you’ve had one or more claims within that timeframe. Here’s why this happens and what it means for homeowners:
Claims History Impacts Insurers Risk Assessment
Insurance companies rely heavily on a homeowner’s claims history to assess their level of risk. If you’ve had claims in the past five years, insurers may consider you a higher-risk customer. The rationale behind this is simple: if you’ve experienced multiple claims recently, you are statistically more likely to file another claim in the near future. For insurers, this could mean higher costs, and thus, higher premiums, which makes it less attractive to take you on as a policyholder.
Even though a claim might be for something minor, like a small water leak or a broken window, the fact that it’s recent can lead insurers to believe there’s a pattern or underlying risk that may continue, such as poor maintenance or frequent property issues.
The 5-Year Window: Why It’s Significant
While the average time frame between homeowner insurance claims is generally reported as around 7 to 10 years most insurance carriers look at the past five years of claims history when determining your eligibility for a new policy or when calculating premiums. The five-year period is significant because it allows insurers to have a clearer picture of your risk profile.
- 5 years or less: If you’ve had a claim within this period, the insurer is likely to consider it a significant factor in your risk assessment. A major claim in this window (e.g., fire or water damage) can significantly impact your chances of getting a new quote, especially from the more competitive insurers.
- More than 5 years ago: Insurers may be more willing to overlook older claims, especially if your home has been claim-free for several years. However, the number and severity of claims during this period can still influence how the insurer views you.
How Multiple Claims Can Limit Your Options
Not only will having recent claims on your record limit your ability to get quoted, but multiple claims over the past few years can be even more damaging to your prospects. For example:
- If you’ve had two or more claims in the past five years, insurers may see you as a “frequent claimant,” which can significantly reduce your chances of receiving a quote or could result in a non-renewal from the insurance company.
- In some cases, an insurer may simply refuse to quote you if you’ve had several claims in a short period, as they might consider the risk of insuring you to be too high.
The Impact of Different Types of Claims
Not all claims are treated equally. Insurance carriers typically classify claims based on their severity. For example:
- Minor claims (such as a small claim for a broken window) might be less likely to disqualify you from getting a quote but can still result in higher premiums.
- Major claims (such as a fire, flooding, or extensive water damage) are far more impactful and can result in a carrier refusing to offer a policy altogether.
However, even weather-related claims (such as damage from a hurricane or tornado) might be seen as unavoidable, but they still impact the risk factor in the eyes of the insurer. Frequent claims, even of lower severity, can add up and make it more challenging to secure a quote.
How to Improve Your Chances of Getting a Quote After a Claim
When homeowners face small issues, it can be tempting to file an insurance claim. However, filing even small claims can lead to higher premiums, as insurers often raise rates after claims. If the repair cost is close to or lower than your deductible, it may not be worth filing a claim at all. Instead, consider opting for a higher deductible. This lowers your premiums, allowing you to cover minor repairs out of pocket and save your insurance for larger, more expensive issues, like major damage or disasters. This way, you can keep premiums low while ensuring coverage for bigger problems.
If the claim was related to an issue that could be addressed, such as a leaky roof or outdated electrical wiring, make sure you’ve repaired or updated the property before applying for a new policy. Showing that you’ve taken steps to reduce future risks can make insurers more likely to offer coverage.
Conclusion: Navigating the 5- Year Claim Window
The 5-year claims window is a significant factor in securing homeowners insurance quotes. Insurance companies use claims history to assess risk, and recent claims, especially multiple ones, can make it difficult to obtain coverage or lead to higher premiums. If you’ve had a claim within the past five years, it’s essential to be proactive in shopping around and demonstrating that you’ve addressed any underlying issues.
While recent claims can present challenges, they don’t automatically disqualify you from getting coverage. By understanding the process, being prepared to explain your claims history, and taking steps to reduce risk, you can still find affordable and reliable homeowners insurance even with a past claim.
