Minnesotans who make a first-time insurance claim on their homeowner's policy will see their premiums jump by an average of 21 percent. If that seems like a lot, it is. The Business Journal reports Minnesota homeowners see the highest such increase in the nation--and you can blame Mother Nature for it.
The Business Journal cites an industry report compiled by InsuranceQuotes.com, which commissioned a study by six large insurance companies to review rates after claims. The report found the national average increase was 9 percent.
Mark Kulda, spokesman for the Insurance Federation of Minnesota, said there has been more than a 250 percent increase in premium costs in Minnesota between 1998 and 2010. The average annual premium is $961, well above the national average.
“We can thank natural disasters for that,” Kulda said, citing the unprecedented uptick in claims from weather-related events. In 1998, Minnesota insurers experienced $1.5 billion in storm losses—more than the previous 40 years combined. In 2010, 144 tornadoes touched down in the state, more than three times its annual average.
The study’s findings come as most U.S. families are experiencing an increase in their homeowner policy premiums. According to data from the National Association of Insurance Commissioners (NAIC), the average cost of home insurance increased 36 percent between 2003 and 2010.