Minn. homeowner insurance rates soarby Martin Moylan, Minnesota Public Radio
ST. PAUL, Minn. — A single insurance claim could raise a Minnesota homeowner's annual premium by about one-fifth, or $200 on an average policy, according to a new study.
In a nationwide review, InsuranceQuotes.com examined how filing a single claim of $30,000 for a home insured for $144,000 would affect the homeowner.
In Minnesota, such claims would lead to an average rate increase of 21 percent, the highest in the nation. The study's findings are a reminder that filing a relatively small claim isn't always in the best financial interest of a homeowner, said Laura Adams an analyst for of InsuranceQuotes.com.
"That's just the reality with insurance these days," Adams said. "So, consumers need to speak to their insurance company or agent about what the financial ramifications of making a claim could be. Not only could the rate go up. But you could lose something known as a claim-free discount."
Because of catastrophic damage from monster storms, home insurance premiums have soared for all Minnesota homeowners in recent years, even those that have not made claims.
"Since 1998, we've had an enormous number of catastrophes," said Mark Kulda, a spokesman for the Insurance Federation of Minnesota. "And now we're a top catastrophe state and we no longer have a good bargain on homeowner's insurance."
Rates for the average Minnesota homeowner insurance policy rose more than 250 percent from 1997 to 2010, to $981. Nationwide, the average policy cost $909.
Average premiums in Minnesota/Rankings 1997-2010
|Year||Avg. Premium||National Ranking||National Avg.|
Total Minnesota percent increase 1997-2010: 267%
Nationwide average percent increase 1997-2010: 199%
Source: Insurance Federation of Minnesota, Jan. 2013. Data: NAIC Homeowners Insurance Report 2004. I.I.I. Factbooks 2001, 2002, 2004, 2005, 2008, 2009, 2011, 2012, 2013