Think Twice Before Filing: How Small Claims Can Drive Big Premium Increases  

APRIL 7, 2026

Insurance claim frequency and severity have risen notably in recent years, becoming more complex, costly, and consequential.

In 2025, natural disasters placed significant pressure on the global insurance market. During the first half of 2025, the U.S. experienced approximately $44 billion in insured losses from wind and hail events alone. In addition, ongoing tariffs, labor shortages, and supply chain disruptions continue to drive up repair and replacement costs, contributing to slower, costly claim resolution.

These factors continue to fuel increases in homeowners and automobile insurance premiums nationwide.¹ As costs escalate, understanding when to file a claim — and when not to — has become more critical than ever.

Strategic Claim Submission  

Recent industry data shows consumers are paying roughly 24% more for homeowners insurance and 32% more for auto insurance than they did three years ago.² Small claims are a key contributor to these rising costs.

While minor losses were once considered routine use of insurance, that is no longer the case. Today, a single small claim (e.g., towing, glass chip/replacement, minor water damage, etc.) can trigger a surcharge that substantially increases premium — compounding the significant rate hikes already occurring across the market.

As insurers continue to monitor small losses closely, minimizing unnecessary claims can help protect both long‑term insurability and affordability. USI Insurance Services recommends considering alternatives to filing insurance claims:

• A home warranty policy may help prevent repeated, low‑severity home claims that can follow you for years.
• Similarly, AAA or comparable roadside assistance services can help avoid filing minor auto claims.³

How’s Your CLUE Report?  

Many consumers are unaware they have a CLUE report — or how significantly it can influence their insurance premiums. A Comprehensive Loss Underwriting Exchange (CLUE) report functions much like an insurance “credit report” and is widely used across the industry for underwriting decisions. More than 95% of homeowners insurers and 99% of auto insurers rely on CLUE data when determining pricing or eligibility. 

Each report contains seven years of claim history, including every home or auto claim filed, the type of loss, dates of loss, amounts paid, and related property or vehicle details.⁴ Insurers use this information to identify patterns, assess risk, set premiums, and screen for potential fraud. 

Under the Fair Credit Reporting Act, individuals are entitled to one free CLUE report per year If you have not reviewed yours recently, it is advisable to do so — errors are more common than you may expect, and a single inaccurate entry can increase your premiums by hundreds or even thousands of dollars annually.

Multiple Claims  

If you already have multiple claims on your CLUE report, you’re not alone. Catastrophic weather patterns, aging housing stock, and rising repair costs have driven an increase in claim activity nationwide. A busy claims history can make the acquisition of reasonably priced insurance challenging. However, there are effective strategies to strengthen your profile over time.

Avoid filing any additional small claims, as each new incident reinforces the risk patterns insurers use in underwriting. Raising your deductibles can also signal you’re less likely to submit minor losses. Investing in home or vehicle upgrades — such as impact‑resistant roofing, water‑leak sensors, enhanced security or new tires — can further reduce your exposure.⁵

Explore insurers with broader underwriting appetites. Surplus lines carriers — once considered a last‑resort option — are now a valuable tool in today’s insurance landscape. These markets offer more flexibility, allowing you to customize coverage to align with your priorities.  

Finally, time plays an important role in improving your risk profile. CLUE records fall off after seven years, meaning older claims will eventually age out — gradually strengthening your insurability and easing future underwriting considerations.