Allstate Corp., the second-largest home insurer in Louisiana, has asked for an insurance rate increase for 144,000 homeowners who get their coverage from two of the corporations local subsidiaries.
According to the Louisiana state insurance department, Allstate wants an average increase of 5.9 percent for 73,000 homeowners with policies from Allstate Indemnity Co, and an 11.3 percent rate increase for 71,000 homeowners with coverage from Allstate Insurance Co. Added together, these rate hikes represent $17 million.
If Jim Donelon, the Louisiana Insurance Commissioner, approves the rate increases, they would go into effect with new and renewal policies effective March 1st.
Allison Hatcher, speaking on behalf of Allstate, explained that this rate increase is meant to cover the corporations cost of reinsurance, which is basically the coverage that Allstate takes from other companies in order to help cover damages caused by catastrophic events like hurricanes and floods. Such reinsurance charges are usually built into homeowner’s policy premiums, and are generally higher for homeowners in coastal areas.
Allstate’s last rate increase in Louisiana was in August, 2010, when the higher rates ranged from 2.9 percent to 11.6 percent depending on the specific Allstate branch writing the coverage.
State Farm, the state’s largest insurer of private homes, has already asked for and received a rate hike of it’s own this year.
Commissioner Donelon has 30-45 days to consider Allstate’s request before making his decision.