Photo (cc) by State Farm
Broken window? Damaged gutter? You should think twice (or even three times, depending on where you live) before filing a homeowners claim.
“The average rate hike for a family filing a homeowners claim is about 9 percent, or $150 a year, according to a new study by Insurance Quotes,” says CNBC’s Herb Weisbaum. In some states, premiums can jump double that amount:
- Minnesota — 21 percent.
- Connecticut — 21 percent.
- Maryland — 19 percent.
- California — 18 percent.
- Oregon — 17 percent.
In contrast, the study says premiums in Texas, New York, Florida, Vermont and Massachusetts rise 2 percent or less after a single claim. You can find where your state ranks on the list here. The study was based on rates from six large insurers for a single-family residence insured for $144,000 and a claim of up to $30,000.
The differences between premium hikes often come from state law, Weisbaum says. In Texas, for instance, companies can’t boost rates at all for a single claim. Policy prices are also higher in states with routine natural disasters such as hurricanes and flooding.
“If the loss is only $1,000 or $2,000 above your deductible, you may be better off paying for the repairs out-of-pocket,” Michael Barry of the Insurance Information Institute told Weisbaum. And if you want to lower your premium, take the highest deductible you can afford. It means paying more when disaster strikes, but less the rest of the time.
For more advice, check out our story “When to File a Homeowners Insurance Claim.”