Making a single claim can 'push up insurance costs by more than 50%'

·4-min read
Making a single claim can drive up insurance costs by more than 50%
Customers who have made one claim on their home insurance pay an average 57% more than those who have not made any claims. Photo: Getty

Making a single claim on your home insurance can push up insurance costs by more than 50%, according to a new study from consumer group Which?

Customers who have made one claim on their home insurance pay an average 57% — or £91 — more than those who have not made any claims.

Having two recent home insurance claims sent the average premium rocketing from £161 for a customer with no claims to £359 — an increase of 123%, according to the investigation by Which? and comparison site GoCompare.

The higher prices for home insurance claimants could be due to the nature of their claims, Which? said.

Almost a third (30%) of home claims were for accidental loss or damage at home, a quarter (25%) were because of escape of water and 9% were to cover thefts from the home.

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These claims could all call for complex or expensive replacements, or potential concerns about the security of the claimant's home.

In comparison, motorists with two recent car insurance claims only paid an average of 8% — or £69 — more than those who hadn’t made any claims.

The investigation analysed the averages of millions of quotes received by drivers and households using the GoCompare comparison service between January and August 2021.

Perhaps unsurprisingly, consumers who had made several claims were quoted more on average, and the premium increased as more claims were made.

However, making claims on home insurance seemed to have a bigger impact on prices than claiming on car insurance.

Average claimants pay. Chart: Which?
Average claimants pay. Chart: Which?

Road users who had made four claims on their car insurance paid on average £469 more — a rise of 53%. This was still a smaller cost increase than the 57% rise for home insurance customers with one claim.

Among car insurance customers, drivers who had made one claim even paid £81 less than those who had not claimed before — a price decrease of 9%.

This could be down to motorists taking the time to shop around for better deals in order to avoid paying more.

Which? advised customers that "honesty is the best policy", whether or not you decide to claim. "If an insurer learns you have failed to disclose a fact especially while filling in a form asking you about your history, it could at worst consider this ‘non-disclosure’ and use it as a basis to decline a claim or cancel a policy," said Which?

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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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.”

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