how an insurance claim works
a paid insurance claim serves to indemnify a policyholder against financial loss an individual or group pays premiums as consideration for the completion of an insurance contract between the insured party and an insurance carrier the most common insurance claims involve costs for medical goods and services physical damage loss of life liability for the ownership of dwellings homeowners landlords and renters and liability resulting from the operation of automobiles for property and causality insurance policies regardless of the scope of an accident or who was at fault the number of insurance claims you file has a direct impact on the rate you pay to gain coverage typically through installment payments called insurance premiums the greater the number of claims that are filed by a policyholder the greater the likelihood of a rate hike in some cases it s possible if you file too many claims that the insurance company may decide to deny you coverage if the claim is being filed based on the damage to property that you caused your rates will almost surely rise on the other hand if you aren t at fault your rates may or may not increase for example getting hit from behind when your car is parked or having siding blow off your house during a storm are both events that are clearly not the result of the policyholder however mitigating circumstances such as the number of previous claims you have filed the number of speeding tickets you have received the frequency of natural disasters in your area earthquakes hurricanes floods and even a low credit rating can all cause your rates to go up even if the latest claim was made for damage you didn t cause 