Homeowners should expect their insurance rates to rise

Homeowners InsuranceMany of the largest homeowners insurance providers in the country, including Travelers, Allstate, and State Farm, will be increasing their rates this year following losses in 2011 that were far greater than had been predicted by the industry.

The second biggest homeowners insurance company in the United States, Allstate, has already announced that it will be boosting its rates by 5.6 percent between now and September 30, 2012. They have also indicated that policyholders should expect other increases, as well.

Travelers has also discussed the increases that will be experienced by their own policyholders following a reevaluation of the storm risk in the United States. Equally the largest American home insurer, State Farm, will be continuing its third straight year of increases to rates across the country.

At a time when interest rates are nearing record lows, the investment incomes for insurance companies have been hard hit, and the claim costs soared throughout the nation least year following wildfires, tornadoes, and Hurricane Irene.

According to the National Association of Insurance Commissioners (NAIC) data, all through the home insurance industry, the average annual underwriting losses on the policies for the last decade came to a close in 2010.

A Sanford C. Bernstein & Co. analyst, Josh Sterling said that this indicated that the coverage that has been provided to homeowners “has been really underpriced”. He explained that when one examines the data from a decade ago, this was the sector of the insurance industry that was leading in losses.

At the same time, NAIC data has shown that during the same period, personal auto coverage has maintained its profitability.

Live insurance news update posted everyday.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.