Does the cost of home insurance go up after a claim?

If you’ve made a home insurance claim recently, or if you’re considering making a claim, you may be wondering how it will impact your premium going forward.

The short answer? Yes, your premium is likely to rise. But by how much, and for how long, depends on several factors.

In this guide, we’ll explain what causes home insurance premiums to rise after a claim, how much they might increase, and answer common questions about premium changes.

How much will my premium increase if I make a claim?

According to research from GoCompare reported by The Independent, the average home insurance premium increases by £91 after a single claim, and can more than double for people with multiple claims on record. While some premiums only rise by £30–£100 per year, the increase can be significantly higher depending on the type of claim, your insurer, and your claims history.

For example, if your premium is £300 per year and you make a claim, you might see it rise to £400 or more at renewal, depending on the circumstances.

Because there’s no universal pricing model, two people making the same type of claim could see very different outcomes. That’s why it’s important to understand the broader risk factors that influence insurers’ decisions.

Factors influencing premium increases after a home insurance claim

1. Type and value of the claim

The nature and cost of your claim significantly impact your premium. High-cost claims, such as those resulting from fires or floods, often lead to more substantial premium increases compared to lower-cost claims like minor accidental damage.

2. Number of past claims (Within 3–5 years)

Insurers assess your claims history over the past few years. Multiple claims within this period can signal higher risk, prompting insurers to raise premiums or impose stricter terms.

3. Fault or negligence

If a claim results from negligence or preventable circumstances, insurers may view you as a higher risk, leading to increased premiums. Conversely, claims arising from unavoidable events may have a lesser impact.

4. No Claims Discount (NCD) protection

A No Claims Discount (NCD) is a reduction in your premium for each year you don’t make a claim. Some policies let you protect this discount, so a claim may not reduce your NCD. However, even with NCD protection, your base premium could still rise after a claim because your overall risk profile changes.

5. Property location and risk profile

The geographical location of your property influences premium calculations. Areas prone to flooding, high crime rates, or other risks can lead to higher premiums, especially after a claim.

6. Insurer’s risk assessment model

Each insurer employs proprietary models to assess risk, considering various factors such as property characteristics, local risk data, and individual claim history. These models determine how a claim affects your premium.

How long will a claim affect my premium?

Most insurers ask about claims made within the last five years when providing a quote. This means the effect of a claim may linger for some time. Some providers might only look at the last three years, but five is more common.

It’s important to declare previous claims when switching or renewing. Not doing so can invalidate future cover.

Is it worth making a claim?

Whether or not you should make a claim depends on the size of the loss versus the potential long-term cost of higher premiums.

For example, claiming for minor accidental damage worth £200 might not be worth it if it leads to a £50 annual premium increase for the next 3-5 years.

But for serious issues, like a kitchen fire or flood damage, it’s almost always worth claiming. That’s the purpose of having insurance: to cover you in times of serious loss.

First-hand insight: What we see at Morgan Clark

At Morgan Clark, we typically assist clients with large, complex claims like floods, fires, and structural damage, where the cost of repair far exceeds the policy excess or potential premium increase.

In many of these cases, the increase in future premiums is modest compared to the scale of the loss. Our clients are often surprised to find that a major claim doesn’t always result in a dramatic hike in future insurance costs.

It’s also worth noting that after a serious incident like a fire, the repaired property is often safer than before. Local authority standards, combined with insurer-funded reinstatement, typically result in upgrades like:

• Hard-wired smoke detectors
• Fire doors and fire breaks
• Updated electrics and plumbing
• Enhanced structural safety
  

These improvements often reduce the risk of a repeat event, potentially making the property a safer proposition for underwriters.

By contrast, what tends to impact future coverage more severely are rejected claims, misrepresented details, or evidence of fraud, rather than the simple fact that a claim was made.

As Loss Assessors, we often speak with people who aren’t sure whether to claim. We can help you weigh the financial pros and cons, and guide you through the process if you do choose to go ahead.