Will Water Damage Raise My Insurance Premium? What Chicago Homeowners Need to Know in 2025

Water damage is one of the most common—and costly—claims homeowners make. But here’s what most people don’t realize: the long-term cost of water damage may not come from the water itself. It may come from your next insurance bill.

I’ve been in the restoration business in the Chicagoland area for over 40 years, and I’ve seen homeowners unknowingly cause their premiums to spike—or worse, get dropped—simply by filing a claim at the wrong time. If you live in Chicago, the North Shore, or the western suburbs, understanding how water damage affects your insurance premiums can save you thousands.

The #1 Question: Does Water Damage Increase Insurance Premiums?

Short answer? Yes. But it depends on a few key factors:

• The cause of the damage (sudden burst vs. long-term leak)
• Whether it’s your first claim
• The size of the payout
• Whether mold develops
• Your zip code’s loss history

In towns like Wilmette, Lake Forest, or Oak Park, where homes can be 80+ years old, even a minor pipe issue can escalate quickly. Insurers see multiple claims from aging properties as risk red flags.

Water Damage vs. Flood Damage: Why Illinois Homeowners Must Know the Difference

This is a mistake I see all the time: people assume water damage is covered the same as flood damage. It’s not.

• Water damage typically refers to sudden, internal issues: pipe bursts, appliance leaks, roof leaks after a storm.
• Flood damage refers to rising groundwater, flash flooding, or sewer backups — and is NOT covered under most homeowners policies unless you have a separate flood policy.

If you’re in Des Plaines, Elmwood Park, or Skokie, you’re in areas that regularly deal with flash flooding from the Des Plaines and North Branch rivers. Without flood insurance, your claim might be denied.

How One Small Leak Could Cost You Thousands

Let me give you a real example. A homeowner in Hubbard Woods (Winnetka) noticed bubbling paint near a window. Instead of investigating further, they filed a water damage claim. The insurer sent an adjuster, who found signs of long-term leakage—which is typically considered neglect. The claim was denied, but it still appeared on their record.

Months later, when they had a legitimate pipe burst, the insurer increased their deductible and premium.

That one mistake? It cost them $4,800 in out-of-pocket expenses.

When You Should—and Shouldn’t—File a Claim

This is one of the most common questions I get.

File a claim if:

• The water damage is severe (over $5,000 in loss)
• Structural materials are affected (walls, floors, insulation)
• You’re not sure if mold is forming

Do NOT file a claim if:

• The cost of repairs is close to your deductible
• The source is unclear or ongoing
• You’ve filed another claim within 3–5 years

In Northbrook, for instance, we helped a family clean up a dishwasher leak that soaked part of their hardwood floor. The estimate? $2,200. Their deductible? $1,500. I advised them to pay out of pocket. Why? Because their last roof claim had already raised their premium. A second one would’ve risked cancellation.

What Insurers Look For in Repeat Water Claims

If you live in a high-risk zip code or have filed two or more claims, you may be labeled "high risk" or even "habitual claimant." That can lead to:

• Premium increases of 20–80%
• Non-renewal at the end of your policy term
• Limited coverage options (you’ll get dropped into the substandard market)

This hits areas like Rogers Park, Highland Park, Glenview, and Lincolnwood, where aging infrastructure leads to frequent plumbing issues.

How to Protect Your Home—And Your Premium

Here’s what I tell every homeowner, from Deerfield to Bridgeport:

• Fix minor leaks before they become claims
• Install water leak detectors in basements, behind dishwashers, near water heaters
• Keep good records of any repairs or maintenance
• Use a certified restoration firm (like ours) that provides documentation insurers trust

Need help deciding whether to file? Give us a call. I’m always happy to offer advice before you involve your insurance company.

Why Local Expertise Matters

Restoration isn’t just about drying out a room. It’s about knowing the homes, plumbing, and weather patterns unique to Chicago’s bungalow belt, Skokie Ridge, Techny in Northbrook, or the Conway Farms subdivision in Lake Forest.

Our team at ServiceMaster Restoration By Simons has served Cook, Lake, and DuPage Counties for over 40 years. We’ve worked in:

• Chicago neighborhoods like Portage Park, West Loop, North Center, and Bronzeville
• North Shore towns like Glencoe, Winnetka, and Kenilworth
• Western suburbs like Downers Grove, Naperville, and Elmhurst

We know how insurance carriers behave in these areas—and how to help you make smart choices.

FAQs

Q: Does a water damage claim always raise your premium?
A: Not always. But even a small claim can have a long-term impact if you’re in a high-risk area or file multiple times.

Q: What if mold appears later? Can I still file?
A: Possibly—but delayed mold reporting could void coverage. Always get it documented right away.

Q: Should I tell my insurance about every leak?
A: No. Talk to a professional first. Some minor issues are better handled privately.

About the Author

Sam Simon is the owner of ServiceMaster Restoration By Simons, a multi-award-winning disaster restoration firm serving Chicago, the North Shore, and the western suburbs. With over 30 years of experience and credentials including IICRC Master Fire & Water Restorer, Sam is the co-author of RESTORE: A Complete Guide to Protecting Your Home As Your Most Valuable Asset. His company is an IICRC Certified Firm and proud member of the Restoration Industry Association.

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