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Home insurance claims increase
By Insure.com staff

The cost of home insurance claims has risen dramatically in the last 15 years, according to a new study by the Insurance Research Council.

From 1997 to 2011, the average claim payment per insured home nationwide rose an average 7.4 percent a year. In 2011 alone, insurance claim costs per insured home rose 27 percent.

The average claim payment per insured home in 2011 was $626, 173 percent more than the average $229 claim payment per insured home in 1997.

The study examined two categories of claims -- those that were related to catastrophic events, such as tornadoes, and those that were unrelated to catastrophes.

The cost of both types of claims increased by about the same margin over 15 years. The average non-catastrophe-related claim was $8,077 in 2011, and the average catastrophe-related claim was $7,553.

But the number of claims filed was markedly different for the two groups. The number of claims unrelated to catastrophic events fell from 1997 to 2005, then rose at an average rate of 2.9 percent each year after 2005. The number of catastrophe-related claims remained fairly flat through much of the period.

Catastrophe-related claims, meanwhile, accounted for 25 percent of overall claim costs nationwide from 1997 to 2003, but 39 percent of overall claim costs from 2004 to 2011, the study found.

Insurance companies will face steep challenges to respond to the rapid growth in claim costs, noted Elizabeth Sprinkel, senior vice president of the Insurance Research Council.

"In addition, consumers will find it increasingly important to consider steps to control their personal exposure to risk and to mitigate the damages and costs associated with severe weather events," she said in a press statement.

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