Many people assume their insurance premiums only increase after a large claim or an accident that was their fault.
But the truth is more nuanced.
Insurance companies evaluate multiple factors when determining how claims affect your premiums. Understanding these factors can help you make better decisions when deciding whether to file a claim.
At Leal Insurance Services, we believe clarity leads to better protection. Let’s break down how insurers really look at claim history.
Claim Severity
Claim severity refers to how expensive a claim is.
Larger claims typically carry more weight because they represent a greater financial loss for the insurance company.
For example:
• Minor vehicle repair: $1,200
• Major accident with injuries: $35,000+
Even though both situations involve one claim, the higher severity claim often has a larger influence on premium adjustments.
Claim Frequency
Claim frequency measures how often claims occur.
From an underwriting perspective, multiple claims over a short period of time signal a higher probability of future losses.
For example:
• One claim over 10 years = normal risk
• Three claims in two years = elevated risk
Insurance companies rely heavily on this data when calculating renewal premiums.
Claim Type
Different types of claims are evaluated differently.
Common categories include:
Auto Insurance
• Collision
• Comprehensive
• Liability
Home Insurance
• Water damage
• Fire
• Windstorm
• Theft
Certain types of claims — particularly water damage for homeowners — tend to receive more scrutiny because they are statistically more likely to repeat.
The Truth About “Not-At-Fault” Claims
Many drivers believe not-at-fault accidents never impact premiums.
While these claims often carry less weight than at-fault accidents, they still appear on a policyholder’s insurance history.
Insurance companies evaluate the total pattern of claims activity, not just fault.
Reported Claims That Pay $0
Another important detail many policyholders don’t realize is that reported incidents can still appear on insurance records.
Even if a claim ultimately results in no payout, the record may affect eligibility for claims-free discounts.
These discounts can significantly reduce premiums, so losing them can indirectly increase costs.
Why Working With an Insurance Advisor Matters
Insurance exists to protect you when the unexpected happens.
But deciding when to file a claim can sometimes require careful consideration.
An experienced insurance advisor can help you evaluate:
• Whether the claim makes financial sense
• Potential long-term premium impacts
• Alternative options when damage is near the deductible
Understanding the system allows you to make informed decisions when risk shows up.
Final Thoughts
Insurance premiums are not based on a single claim alone.
Carriers evaluate multiple factors including:
• Claim severity
• Claim frequency
• Claim type
• Reported incidents
The more you understand how insurers calculate risk, the better equipped you’ll be to protect what matters most.
If you ever have questions about your coverage or how a claim might impact your policy, the team at Leal Insurance Services is here to help.