Does Filing Homeowner’s Insurance Claim Lead to Higher Premiums?
(NEW YORK) -- Will submitting a homeowner's insurance claim lead to an increase in your premium? According to a new study, making a single homeowner's insurance claim leads to a 9 percent premium increase, on average, across the U.S.
But the increases vary significantly by state, according to the analysis by InsuranceQuotes.com, a company owned by Bankrate. This is the first time that InsuranceQuotes.com has analyzed the economic effects of making a claim.
In Minnesota and Connecticut, premiums can increase a whopping 21 percent after a homeowner's first insurance claim. In contrast, Texans don't pay more at all for their homeowner's insurance premiums after their first claim, according to the analysis.
Insurance premiums are affected by a number of things, but claims history can be a larger factor than many people realize, said Laura Adams, senior insurance analyst for InsuranceQuotes.com.
If you submit numerous claims that are high-dollar amounts, you are considered a risky insurance customer, which is taken into account for one's base rate. Other things that affect a premium include the size and age of a home, and characteristics, such as whether you have an alarm system.
"The most interesting finding from this study is how widely the increase for home insurance can vary depending on where you live," Adams said.
One reason why average insurance premium increases varied so widely is that insurance policies are regulated state by state.
"The laws in each state vary pretty dramatically," she said. "For instance, in Texas, they've had a history of many different types of claims such as natural disasters in that state. That's why the base rate for insurance is pretty high in that state."
To get the best rate and policy, Adams suggests homeowners shop around and talk to their agents before submitting a claim to see if it's worth doing so.
Here is a list of the states with the highest and lowest average premium increases after a first homeowner's insurance claim is made, according to InsuranceQuotes.com -- plus the state's average annual premium, according to the National Association of Insurance Commissioners:
Highest increases after a claim:
Minnesota: 21 percent
Average premium -- $981
Connecticut: 21 percent
Average premium -- $1,052
Maryland: 19 percent
Average premium -- $784
California: 18 percent
Average premium -- $939
Oregon: 17 percent
Average premium -- $535
Lowest increases after a claim:
Texas: 0 percent
Average premium -- $1,560
New York: 1 percent
Average premium -- $1,044
Florida: 2 percent
Average premium --$1,544
Vermont: 2 percent
Average premium -- $730
Massachusetts: 2 percent
Average premium -- $1,050
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