The cost of the coverage within the state will jump after even a single claim has been made.
According to the results of a recent study, filing just one claim is enough to cause the premiums for a homeowners insurance policy to skyrocket in the state of Minnesota, which was the highest rate of increase in the country following one claim.
In fact, the research showed that after a claim, the average increase in premiums was 21.2 percent.
That figure is according to a homeowners insurance report that was issued by InsuranceQuotes.com. It found the rise following a claim in Minnesota was tremendously higher than the average for the rest of the country, which was approximately 9 percent. The data placed Connecticut in a close second place, with increases of 20.6 percent following a single claim.
On the other hand, Texas saw a zero percent increase in homeowners insurance premiums after a claim.
The reason for that was that Texas law prohibits homeowners insurance companies from being able to increase premiums following claims. A senior insurance analyst named Laura Adams from the Bankrate.com owned website explained that “We were really surprised by how much the increase varies depending on where you live.”
Adams explained that she believes that the tornadoes and other severe weather that has been ripping through Minnesota on a regular basis since 1998 is causing the homeowners insurance premiums increases to skyrocket in Minnesota. It is merely a case of insurers attempting to try to keep up with the rising risk levels on their books. In fact, insurers have been using the high level of catastrophe risk in Minnesota as the primary justification for the rate increases over the last few years.
What people in Minnesota will need to learn from this trend, said Adams, is that they need to file their homeowners insurance claims wisely to ensure that it remains worth their while. They should focus on making claims only for unforeseen catastrophic events, as opposed to small amounts of damage from an accident, such as baseball thrown through a window pane. She pointed out that in small cases of damage, it is more cost effective for the policyholders to pay for their own damage.