Will making an insurance claim raise your rates?
Unfortunately, if you make a claim on your insurance policy your insurer is likely to increase your premium, and this also applies if you have protected no claims discount. You can expect your monthly payments to rise by about ten to fifteen percent; although this does vary between insurance providers, and depends on what type of claim you have made.
In addition, the more claims you make, the higher your premium will become as you will be considered as being a high-risk customer; so avoid making very small claims as these could prove costly in the longer term. If you pay to protect your no claims discount you will still receive a discount, but on the increased cost of the premium. This is due to the fact that you pay to protect your discount, and not the actual amount of the premium.
You can keep your insurance premiums to a minimum in a variety of ways if you have recently made a claim and have seen your premiums rise. Firstly, make sure that you take out the right amount of cover. If, for example, you are buying buildings and contents insurance make sure that you work out beforehand exactly how much cover you need; too little, and you could end up under-insured (which can prove disastrous in the event of a claim), and too much and you could end up paying over the odds for your premium. When taking out buildings insurance remember that the cover you require is based upon the amount of money it would take to re-build your property, and not its market value; rebuilding costs are usually substantially less than the full market value. The cost of re-building your property can usually be found in the initial surveyor’s report, or alternatively you can access calculators online that help you to work out re-building costs.
When it comes down to insuring the contents of your property again it is important that you get this figure right as you could end up under-insured, or you could end up paying for far more cover than you actually need. Go around every room in your property and make a full inventory of every item you own with its associated value. It is also a good idea to keep this list in a secure place away from your property should your home be severely damaged by flood or fire.
When you receive your renewal notice from your insurance provider it can be tempting to let the policy automatically renew, even if there has been an increase to your premium (which is most often the case). However, just half an hour spent researching quotes online can save you a substantial amount of money. Since the introduction of price comparison sites it has never been easier to compare the prices offered by insurers, and to take out a new policy. Recent research carried out by a leading price comparison site in the UK has revealed that around one in ten people in the market for home insurance could save up to £200 per year by switching their provider. Most certainly, in the case of insurance, it rarely pays to remain loyal to one provider.
If you own your property and are about to renew an existing policy, or take out a new one, then you can often save money by taking out combined buildings and contents insurance from the same provider. You can often save around ten percent when compared to taking out two separate policies with different insurers. You may have two different renewal dates, but most insurance companies will be able to arrange for a joint policy to start on a date that meets your needs, and importantly, leaves you with no gaps in insurance cover.
If a recent claim has resulted in a rise in your premium you can also reduce your costs by improving your security. If you don’t already have one then consider installing a burglar alarm, and likewise, think about installing security lighting on the outside of your property. This can lower your premiums, as can joining a local neighbourhood watch scheme if there is one active in your area. Before installing an alarm system check with your insurer to see which ones they prefer, as in order to reduce your premiums you will need to install a system that is officially approved by your insurance provider.
Another way that you can reduce your insurance premium is to increase your excess, which is the amount that you have to pay out of your own pocket towards a claim. Part of the excess is fixed by your insurer and cannot be changed, but there is also a portion of the excess that is voluntary and which you can set yourself to suit your budget. The higher the excess you are prepared to pay the lower your premium, although make sure that you set your excess to an amount that you can comfortably afford should you need to make a claim.
If the worst happens and you do need to make a claim on your insurance policy then, unfortunately, you can expect your premium to rise. However, the good news is that there are a number of steps that you can take to keep your premiums to a minimum, and sometimes to even reduce them.