What Happens to Your Insurance Policy After Filing a Claim — and What You Can Do About It

Apr 30

2 min read

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Filing an insurance claim can be a stressful experience, especially after a disaster like a wildfire or flood. Many homeowners are left wondering what happens to their insurance policy after they file a claim. Does the coverage change? Can the insurance company cancel the policy? Will premiums go up? This article explains what typically happens and what you can do to protect yourself, particularly in California.

Your Policy Stays Active During the Claims Process

When you file a claim, your policy remains in effect while the insurance company investigates and processes the request. As long as you continue paying your premiums, your coverage does not stop. Insurance companies are not allowed to cancel your policy just because you filed a claim.

The real changes usually occur when it is time to renew the policy.

What Might Happen After a Claim

Policy Non Renewal

In some cases, an insurer may decide not to renew your policy once it expires. This can happen if the company determines that your property is too risky based on your claims history or the location of your home.

In California, however, there are specific protections in place. If your home is located within or near a wildfire disaster zone and the governor has declared a state of emergency, your insurer cannot cancel or refuse to renew your policy for at least one year following the disaster.

Increased Premiums

Another common outcome is a rate increase. Insurance companies may raise your premium at the next renewal if they determine that the risk of insuring your property has gone up. This is more likely if you live in an area that has experienced repeated natural disasters or if you have filed multiple claims in recent years.

Even if the disaster was beyond your control, insurance companies use risk-based pricing models to determine rates, and your home may now be considered more expensive to insure.

Steps You Can Take

Understand Your Rights

In California, insurers must give at least 45 days' notice before canceling or refusing to renew a policy. They must also explain the reason. If you believe the action is unfair, you can file a complaint with the California Department of Insurance.

Shop for New Coverage Early

If you suspect your insurer may not renew your policy, begin searching for new coverage as soon as possible. California offers the FAIR Plan for homeowners who cannot find insurance through the private market. This provides basic fire coverage and can be paired with other policies for broader protection.

Keep Documentation

Maintain records of home improvements that reduce risk, such as defensible space, upgraded roofing, or fire-resistant materials. These improvements can help during policy reviews or when seeking new coverage.

Speak to Your Insurance Agent

If you are considering filing a small claim, talk to your agent first. Sometimes the increase in premium after a claim can be more costly than paying out of pocket.