7 Worst States for Homeowners Filing Insurance Claims

Source: Thinkstock

Source: Thinkstock

Insurance is one of the most prudent yet frustrating products you can buy. Essentially, it’s a form of risk management in which the client transfers the risk of loss to an insurer in exchange for premiums. Most people hope they never have to actually use their insurance policies, but what happens after you file a claim?

Homeowners filing an insurance claims this year could see a significant rate hike. On average, filing just one claim on your home insurance policy results in a 9% increase to your annual premium, according to a new study by InsuranceQuotes.com. That’s higher than the 8% increase seen in 2013. In fact, premiums in 37 states and Washington, D.C. increased by an average of 10% or more after a single claim.

Several factors can cause home insurance rates to increase or decrease across the nation, such as competition and different risk exposure, but Chris Hackett, director of personal lines policy at the Property Casualty Insurers Association of America, notes one primary reason. “There’s a significant statistical correlation between making a claim and the likelihood of making an additional claim in the future. Insurers need to adjust the cost of insurance to compensate for that increased risk.”

While it’s frustrating to be punished for actually using a product you paid for, let’s take a look at the seven worst states for homeowners filing insurance claims based on annual premium hikes.

Source: Getty Images

Source: Getty Images

7. Illinois

  • Premium hike after one claim: 17.7%
  • Premium hike after two claims: 32%

Source: Thinkstock

Source: Thinkstock

6. Utah

  • Premium hike after one claim: 17.7%
  • Premium hike after two claims: 30%

Source: Thinkstock

Source: Thinkstock

5. California

  • Premium hike after one claim: 18%
  • Premium hike after two claims: 24.9%

Photo by A. Messerschmidt/Getty Images

A. Messerschmidt/Getty Images

4. New Mexico

  • Premium hike after one claim: 18.7%
  • Premium hike after two claims: 29.6%

Source: Thinkstock

Source: Thinkstock

3. Arizona

  • Premium hike after one claim: 19.5%
  • Premium hike after two claims: 33.7%

Source: Thinkstock

Source: Thinkstock

2. Connecticut

  • Premium hike after one claim: 21.4%
  • Premium hike after two claims: 51.3%

KAREN BLEIER/AFP/Getty Images

KAREN BLEIER/AFP/Getty Images

1. Wyoming

  • Premium hike after one claim: 31.6%
  • Premium hike after two claims: 36.5%

Follow Eric on Twitter @Mr_Eric_WSCS

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