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How does claiming on home insurance impact your premiums?

Emma Lunn
Written By:
Emma Lunn

Making a single claim on your home insurance policy increases the cost of the next year’s premium by an average of 57%, according to Which?

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

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 (no claims) to £359 (two claims) – a 123% increase. 

A home insurance customer with just one recent claim paid on average £91 (57%) more than customers with no claims. 

Which? says 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 reasons for claiming were accidental loss or damage at home (30%), escape of water (25%), and thefts from the home (9%).

All of these could mean complex or costly replacements, or potential concerns about the security of the property. 

The three most commonly reported car insurance claims were accidents where the driver was at fault but there were no injuries (35%), non-fault accidents where all costs and excesses had been recovered (27%), and single-vehicle accidents (9%). 

Which? enlisted the help of comparison site GoCompare to look 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 (9%) less than those who had not claimed before. A possible explanation is that 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 (8%) more than those who had not claimed. Those who’d made four claims paid on average £469 (53%) more. 

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.”

Ryan Fulthorpe, car and home expert at GoCompare, said: “Making a claim on a car and home insurance policy will almost certainly increase your premiums the following year. And having looked at the data, it shows that 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.”