Farmers Insurance Group, one of the largest insurers in the U.S., has unveiled plans to raise rates on homeowner’s insurance policies in Texas. The new rates, if approved by state regulators, will take effect next year. The company cites the growing number of high cost claims that has been streaming in since 2008 as reason for higher premiums. The proposal for higher rates from Farmers Insurance comes on the heels of a similar proposal from State Farm that would have the same effect on homeowner’s policies.
The insurer is seeking permission to raise rates by an average of 10% throughout the state. The company claims that the past three years have brought heavy insured losses to the company. Indeed, 2008 brought Hurricane Ike, which caused no small amount of damage in the state. Losses were compounded this year by an outbreak of wildfires that charred much of the state and destroyed many homes. Farmers’ new rates, if approved, would affect more than 350,000 policyholders.
State Farm has also submitted a rate increase proposal for properties in Texas. The insurer is seeking to raise rates by 9.6% statewide. Unlike Farmers, however, State Farm is looking to make these new rates effective by the end of this month. The company is also pushing for policyholders to pain an extra 1% deductible by December of this year.
State insurance regulators are reviewing the proposals from both companies and will likely reach a conclusion before the end of the month.