Farmers proposes steep rate hike in Gulf counties
Dallas Morning News
12/13/2007
Associated Press
Farmers Insurance has indicated it wants to raise home insurance rates 20 to 30 percent along the Texas coast, while reducing rates in many other areas.
The company's rate filing with the Texas Department of Insurance on Wednesday indicated a net result of a statewide increase of 2.2 percent with hefty premium hikes in coastal counties and southeast Texas. Many other parts of the state would see modest reductions.
Michelle Levy, a spokeswoman for Farmers, said nearly 50 percent of the company's 686,000 policyholders in Texas would see lower premiums under the plan.
"We feel good about the proposal," Levy said. "We think these rates are fair and justified and represent what we need to be charging in the current Texas market."
The new rates, which will be reviewed by insurance department actuaries, are scheduled to take effect Feb. 16 for new and existing customers.
The new filing comes five months after the company withdrew a proposed 6.6 percent increase in homeowner rates when the insurance department signaled that it would reject the plan.
Ben Gonzales, a spokesman for TDI, said the department will review the filing over the next two months and decide whether it is appropriate before the effective date.
"We're still trying to work with the company," he said.
Levy said the proposal reflects concerns an increased number of hurricanes and tropical storms will threaten the Texas coast over the next few years. The industry saw massive property losses from hurricanes Katrina and Rita in 2005.
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2 comments:
While " Many other parts of the state would see modest reductions." as soon as some tornados ravage the"other parts of the state" that will change.
The rate hike is greed more than anything else. For years the insurance companies were making money hand over fist because they were collecting money and not having to spend any of it, suddenly the tables turned and now they find themselves have to part with it and they don't like that. The insurance companies were happy as loons making money, but they're not at all pleased with having to give some of it back.
Maybe Farmers doesn't quite understand their role as an insurance company.
Clearly insurance regulation and reform are needed at the federal level. Reform is need that will be fair to both the consumers and the insurance companies, but that's not going to happen until after the 2008 elections. Right now insurance reform legislation would either be stalled in the senate by the republican or if it made it to the Bushes desk he'd veto it. Bush has pretty well given big business a blank check to do whatever they want to make money.....to hell with protecting the interest of consumers.
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