Auto insurance companies portray themselves as friendly and forgiving in television commercials, but they are less friendly than you might think. After filing just one claim, car insurance premiums increase by an average of 41.81%, according to an annual study by insuranceQuotes and Quadrant Information Services. Just how much insurance rates are increased depends on the state where you live
States with Highest Rate Increase After one Claim
- New Hampshire: 65.9%
- California: 63.2%
- Rhode Island: 61.7%
- Massachusetts: 60.9%
- Iowa: 56.5%
States with Lowest Rate Increase After one Claim
- Kentucky: 19.4%
- Tennessee: 20.1%
- Michigan: 22.2%
- Oklahoma: 23.4%
- West Virginia: 27.8%
New Hampshire is in a league of its own. Although the state’s average annual premium of $733 is below the national average of $841, it more than makes up for it with a 65.9% rate increase after filing one claim, the highest percentage increase in the nation. After the rate hike, premiums in New Hampshire average $1,216.
For overall premium cost, however, Rhode Island has New Hampshire beat. After just one claim, America’s smallest state has the seventh-highest average premium at $1,066 thanks to the third-highest percentage rate increase of 61.7%. That means drivers in Rhode Island will pay an additional $657 per year on car insurance after one claim, the highest increase in the country dollar-for-dollar.
When looking at our chart, an interesting pattern emerges—all of the largest increases in premiums occur in states that start out with higher premiums, even without any claims having been filed. In most of the states where the premiums start out below the national average, their average rate increases are also lower. Unfortunately for drivers in states like Texas (53% increase after a claim) and Connecticut (43.8%), their premiums start out high and only get worse. Other places, however, start out so low that, even though they have a big jump after a claim, their premium still isn’t too bad compared to some of their neighbors. In Iowa, for example, our hypothetical driver starts out with a premium of $572. After a claim her rate is increased by a whopping 56.5%, but she’s still only paying $895 every year.