Many people see insurance payments as an expense rather than an investment. In fact it’s true that car and home insurance are products you hope you’ll never have to use—unlike the purchase of a new vehicle or pair of shoes! As insurance brokers, we often get calls from clients who insist on making a claim for a small mishap, thinking that they’re finally going to get a return on the insurance premiums they’ve paid all their life. But this isn’t always the best solution, because making claims too frequently can have very unpleasant consequences! In this article, Assurances Multi-Risques wants you to become aware of these consequences and offer you tips on how to avoid them.


For an insurance company, what is considered a high claims frequency?

Unfortunately, the definition of a high frequency of claims varies from one insurance company to the next. Therefore, we cannot give you a maximum number that you shouldn’t exceed. However, sometimes as few as two claims are enough. Over what period of time? It depends. Some insurance companies may go back as far as 10 years in your file to evaluate your claim frequency, while others are more flexible.


How does an insurance company assess your insurance record when you apply for a renewal?

Of course, a claim will increase your insurance premium because you lose your claim-free discount. However, for an insurer, renewal after an insurance claim is still a pretty straightforward task. It becomes more complicated when a policyholder makes several claims in a short period of time. In such a situation, the insurer can come to different decisions (which you probably won’t find to your liking):

    • Increase your deductible and your premium;
    • Require that you take corrective action (for example, if your home has experienced repeat break-ins, they may ask you to install an alarm system connected to a central monitoring station);
    • Reduce and remove some of your coverages;
  • And the worst-case scenario would be nonrenewal—i.e., cancellation of your home, car or business insurance contract. *To find out more, we invite you to read our previous article explaining why insurance companies cancel insurance after many claims.


How to avoid a high claims frequency?

We highly recommend that you contact your insurance agent or broker before making a claim to ask whether it is cost-effective to do so. Avoid making claims for small amounts! Remember that your claims history is an important factor when you renew your insurance. In addition, limiting your claims could allow you to avoid having to buy insurance in the non-standard insurance market, which specializes in high claims frequencies, and paying high premiums. *You can learn more by reading one of our previous articles on problems related to high claims frequencies. We also recommend being proactive by investing in prevention. Believe us—it’s more cost-effective in the medium and long term than making a claim.

To conclude, we hope we have made you more aware of the importance of avoiding making too many claims. And if you were one of those people who hoped to get a return on their insurance investment by making a claim whenever possible, you now know that making claims too often can be expensive! Only your broker or agent can advise you as to whether it’s worth making a claim or if you’d be better off not doing so. To talk to an advisor worthy of the name, contact one of our brokers. They can give you the facts and will be there for you when you need them.