Filed under: Personal Finance, Homeowners Insurance, Financial Education
By Krystal Steinmetz
You may want to think twice before filing a claim on your homeowner's insurance policy. According to a new study from insuranceQuotes.com, filing just one claim -- even a small one -- can send your premium soaring. Of course, the increase depends on a number of factors, including where you live, insuranceQuotes.com said.
The average premium increase is 9 percent for the first claim. Homeowners in Texas are lucky, their state prohibits a premium boost for the first claim. But if you're a homeowner in Wyoming, file a claim and prepare to pony up an additional 32 percent for your policy. Ouch.
Homeowners also face soaring premium increases after filing a single claim in Connecticut (21 percent), Arizona (20 percent), New Mexico (19 percent) and California (18 percent). The lowest increases (2 percent to 4 percent) are in New York, Massachusetts, Florida and Vermont.
More Factors Involved
Homeowners need to be really careful when filing claims," Laura Adams, insuranceQuotes.com's senior analyst, told CBS MoneyWatch. "Even a denied claim can cause your premium to go up. Make sure to know your policy's specific guidelines and only file a claim when absolutely necessary. Winning a small claim could actually cost you money in the long run."
InsuranceQuotes.com said premium increases can change drastically from year to year, depending on a number of trends, including weather and natural disasters. Another factor that affects premium increases is the type of claim you file. Liability claims are the most expensive at 14 percent, followed by theft (13 percent) and vandalism (13 percent).
If you thought the premium increases were bad after filing a single claim, you really won't like what happens if you have to file a second claim. The average premium increase -- which varies by state -- is 20 percent.
