Home insurance: One claim every five years makes premiums 57% pricier

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Households who have made a claim on home insurance once in the last five years pay on average 57 per cent more than those who haven’t, new research has revealed. 

While it is typically cheaper to insure a home than a car, a Which? investigation found the cost of claiming on home insurance can be much higher.

It found that drivers with two recent car insurance claims paid on average £69 more than those who hadn’t claimed.

However, two recent home insurance claims bumped up the average premium from £161, for those with no claims, to £359, for those with two claims – a 123 per cent increase.

Home insurance customers who have made one claim pay 57% more than those who haven't

Home insurance customers who have made one claim pay 57% more than those who haven’t 

Even home insurance customers with just one recent claim paid on average £91, equivalent to 57 per cent, more than customers with no claims.

The reason for home insurance customers facing steeper prices could be down to the nature of their claims. 

Among the home insurance claimants, the most commonly reported reason was accidental loss or damage at home with 30 per cent of claims covering this.

Another 25 per cent claimed for escape of water and 9 per cent claimed for thefts from the home – all of which could mean complex or costly replacements or potential concerns about the security of the property.

Meanwhile, the three most commonly reported car insurance claims were accidents where the driver was at fault but there were no injuries, accounting for 35 per cent.

Other common claims were non-fault accidents where all costs and excesses had been recovered with 27 per cent of drivers claiming for this whilst 9 per cent claimed for single-vehicle accidents.

Which?, with the help of comparison site GoCompare, looked at the averages of millions of quotes received by drivers and households using its service between January and August 2021.

Unsurprisingly, customers who had made multiple claims were quoted more on average, and the premium increased the more claims had been made.

However, among car insurance customers, drivers who had made one claim were on average paying £81, equivalent to 9 per cent, less than those who had not claimed before.

This could be because drivers who take the time to shop around for better deals can avoid paying more.

Drivers who had made two claims paid on average £69, equivalent to 8 per cent, more than those who had not claimed whilst those who had made four claims paid on average £469, equivalent to 53 per cent, more. 

The most common home insurance claim was accidental loss or damage at home, data shows

The most common home insurance claim was accidental loss or damage at home, data shows

Insurers share information with each other about customers’ claims history in industry databases, which allows them to verify what customers say about it when applying for insurance. 

Therefore, broadly speaking, if what the customer has said is accurate, they shouldn’t need to produce further proof.

If they do need to produce additional proof, their best bet is to contact the prior insurer and ask them to supply it in writing.

Ryan Fulthorpe, car and home expert at GoCompare, added: ‘Making a claim on a car and home insurance policy will almost certainly increase your premiums the following year. Having looked at the data, it shows the more claims you make, the more it will impact the price you pay.

‘A number of motorists will have a claim on their insurance and as our stats show, this doesn’t have to impact the price you pay if you have one claim on your policy.

‘Insurance companies will treat claims differently so you might find that by shopping around, you may not end up out of pocket.

‘However, when you start adding two claims into the mix, the general impact is significant.

‘Insurers will treat those who have more than one claim differently as they take into account a propensity to claim, so the more claims you have, the more likely you are to make more.’

Experts say, however, there are steps you can take if you find your premium is soaring after making a claim.

Jenny Ross, Editor of Which? Money, said: ‘The data shows that making claims can significantly affect the price of your insurance, especially for your home.

‘If you’re unhappy with your increased premium, make sure you shop around as other insurers might be prepared to cover you for less.

‘You might decide it’s not worth claiming at all, but insurers can ask you to disclose incidents that could have led to a claim. Honesty is always the best policy, otherwise your insurance could be invalidated.’

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