A claims-free discount is a reduction in your homeowner insurance premium for going a certain number of years without filing a claim. In Texas, most insurers offer a 5% to 15% discount if you have been claim-free for 3 to 5 years.
This discount is one of the easiest ways to save on insurance. It is applied automatically by most carriers, but it pays to confirm with your agent that you are receiving it.
Typical Discount Range: 5% to 15%
The exact discount varies by insurance company, but the range is fairly consistent across the Texas market. Here is what you can typically expect.
- 3 years claim-free: Typically qualifies for a 5% to 10% discount
- 5 years or more claim-free: Typically qualifies for a 10% to 15% discount
- Some insurers offer stepped discounts that increase the longer you go without a claim
- The discount is applied to the total premium, including dwelling, personal property, and liability
- Some carriers cap the discount at a maximum percentage, usually 15%
How to Qualify for the Claims-Free Discount
Qualifying for the claims-free discount is straightforward, but there are a few things to be aware of.
- The discount is based on claims filed on your property, not claims filed by a previous owner
- Some insurers count all claims including weather-related claims; others exclude claims from named storms
- If you switch insurers, your claims-free history may transfer if you provide a letter from your previous carrier
- New homeowners may need to start the clock from their purchase date
- A single claim resets the clock and you lose the discount at your next renewal
Should You Avoid Filing a Claim to Keep the Discount?
This is a common question. The answer depends on the size of the damage relative to your deductible and the value of the discount.
If you have a $1,000 deductible and $1,500 in damage, you might consider paying out of pocket to keep your claims-free discount. A 10% discount on a $1,500 premium saves you $150 per year. If the discount lasts 5 years, that is $750 in savings. The $500 insurance payout is less than the discount you would lose.
For major damage, always file a claim. The discount is not worth skipping a legitimate $10,000 claim. Run the numbers for your specific situation and policy.
