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Understanding Fire Insurance Claims and Premium Increases

What Is an Insurance Claim for Fire?

Experiencing a house fire can be terrifying, but understanding how to file an insurance claim can help ease some of the stress. A standard homeowners insurance policy typically covers the cost to repair, rebuild, or replace your home’s structure and contents after a fire, excluding arson. It also usually covers additional living expenses if your home is uninhabitable during repairs.

To receive payment, you need to file a homeowners insurance claim. This involves contacting your insurance provider, completing a claim form, and documenting the damage with photos, videos, or lists of belongings. An insurance adjuster may visit your home to assess the damage.

Why Does Your Insurance Premium Go Up After a Fire?

Filing a fire insurance claim can lead to an increase in your home insurance premium. This is because fire-related claims often result in higher payouts compared to other types of property damage claims. For instance, the average home insurance claim for fire and lightning-related damages was $83,519 in 2021, significantly higher than the average claim for wind and hail damage.

Insurance companies may also consider your home more susceptible to future fires, especially if you live in a wildfire-prone area, leading to higher premiums.

Other Reasons Your Homeowners Insurance Premium May Increase

Filing a claim isn’t the only reason your homeowners insurance premiums might rise. Other factors include:

• Adding new risks: Installing features like a swimming pool, trampoline, or wood-burning stove can increase your premiums due to the added risk of injury.
• Widespread natural disasters: Insurance losses from natural disasters have increased significantly, causing insurance carriers to raise rates to cover their costs.
• An aging home: Older homes are more prone to problems, making them more expensive to insure.
• Rising construction costs: The cost of construction materials and labor has increased, making repairs and rebuilding more expensive.

Look for Ways to Lower Your Home Insurance Rate

After filing a fire claim, there are steps you can take to prevent rising premiums from straining your budget. Regularly shopping around and comparing prices from different insurance carriers can help keep your costs down. Additionally, maintaining a good credit score can also help minimize your home insurance expenses, as insurance companies often check your credit-based insurance score when pricing your policy.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team is here to help you navigate your mortgage options and find the best solutions for your needs.

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