7 Worst States for Filing Homeowners’ Claims

06 Nov

Homeowners insurance is a necessity but it can be a frustrating product. While everyone wants the protection of homeowners coverage, they know that if they actually need to use it and make a claim, there is a good chance that their premiums will be headed up.

So what will happen to your rates if you do need to file a claim?

There is no doubt that your insurance costs will be headed up and if you live in certain states, it may be going up A LOT. According to a recent study by InsuranceQuotes.com, just one claim will push your rates up an average of 9 percent, which is a tad higher than the 8 percent increase that homeowners saw in 2013.

The data also revealed that in 37 states and Washington D.C. the average increase for one claim was a whopping 10 percent. If you have the unfortunate luck of filing more than one claim a year you can expect your premiums to skyrocket.

While other factors such as increased risk exposure due to shifting weather patterns or increased competition as more insurers move into or leave certain marketplaces can affect premium, your claim record will, in most cases have the biggest impact on your rates. This is due to the fact that statistics show that once you make a claim, you are more likely to make a claim in the future.

Seven States Getting Hit Hard If You Make a Claim

Here are seven states where you will be hit hard if you make a claim on your homeowners insurance.

  1. IllinoisYour premium will head up an average of 17.7 percent after a single claim and 32 percent if you make two claims in a year.
  2. Utah – Just like Illinois, one claim will push your rates up 17.7 percent in Utah. A second claim will bump your payments up 30 percent.
  3. California – Rate hikes in California are a bit higher for one claim, coming in at 18 percent. A second claim will push the rate increase to 24.9 percent, not quite as bad as Illinois and Utah.
  4. New Mexico – A rate bump of 18.7 percent after one claim puts New Mexico in the middle of the pack. A second claim will push your rates up 29.6 percent.
  5. Arizona – Arizona, which is number three when it comes to the biggest increases will hit you with a 19.5 percent rate hike after a first claim. A second claim results in an average increase of 33.7 percent.
  6. Connecticut – Number two on the list is Connecticut, which will whack you with an outrageous 21.4 percent rate increase after a single claim. If you have two claims in a year expect your premium to jump an incredible 51.3 percent.
  7. Wyoming – The number one state on the list will up your rate 31.6 percent after a single claim. Adding another claim is not quite as bad as other states with a 36.5 percent increase coming your way.

About Filing a Claim

Here are a few tips when it comes to deciding whether or not you should file a claim:

Smaller than your deductible – It goes without saying that if the claim is smaller than your deductible, pay it out of pocket. In fact some exerts recommend not filing a claim unless the amount is more than three times your deductible.

Limit the number of claims – If you can possibly help it, never file more than one claim in a year, or several years for that matter. As the numbers above show, multiple claims within a short time frame will push your rates up dramatically.

Document – If you do decide to file a claim, be sure to document everything. The damage to your home, the reason for the claim as well as everyone you talk to at your insurer. This is when a good home inventory will pay off.

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