Why Does a Home Insurance Claim Count Against Me?

Filing a home insurance claim counts against you similarly to the way your auto insurance is affected after an automobile accident. Whether the damage was your fault or not, the claim tells your insurance company that there is a higher likelihood that you will file another claim in the future. Although just filing the claim can have a negative impact on your insurance, the weight of the impact is largely dependent on whether or not your claim was approved or denied.

If your claim was approved, this would be preferred because it tells the insurance company that your claim was considered valid and reasonable by your agent and the other parties involved in the inspection and approval process. Additionally, an approved claim lets the insurance company know that the damage has been repaired and there is a lower likelihood of more damage occurring. For example, if you filed a claim for a new roof because a tree branch fell in after a storm, you are unlikely to experience additional problems with your roof.

Alternatively, a denied claim can have the most dramatic impact on your homeowners insurance. When your claim is denied, it lets your insurance company know that the claim was invalid and may either reflect poor judgment, negligence, and even insurance fraud. This is a scenario you definitely want to avoid at all costs. On top of the claim reflecting negatively on your personality, a denied claim also reveals that there may be unrepaired damage on the home that leaves it vulnerable to future claims.

In keeping with the roof example, say you filed a claim stating that the roof was damaged by a hail storm, but the claim was denied. Although a denial may imply that the damage was not sufficient enough to call for a new roof, it tells your insurance company that those complications may still be there and are likely to surface before a home with a new roof would. Basically, these claims count against you because they indicate to your insurance company how much of a risk you are to them.