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Allstate Requests Rate Hike on Louisiana Homeowners Policies

January 25th, 2012 by Iris | Comments Off | Filed in homeowners insurance, hurricane insurance, rate watch

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.

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State Farm Requesting Changes on Texas Homeowners Coverage

September 16th, 2011 by Iris | Comments Off | Filed in homeowners insurance, insurance news, rate watch

Stae Farm Insurance filed a notice requesting a rate hike averaging 10 percent across the state in Texas homeowners insurance rates, but company officials were quick to announce that with new and larger discounts, homeowners are likely to see effective increases of only 1.4 percent.

Earlier this week, the Dallas Morning News also reported another proposal from State Farm, shifting the deductible on homeowners coverage to 1 percent of the home’s insured value rather than the current schedule of flat-rate deductibles that can be as low as $500.

Representatives of State Farm explained that the new deductibles reflect the increased cost to repair homes after claim-worthy damage.

The requested start-date for these changes is October 15th for new customers and December 1st for those who are already State Farm customers.

A recently established Texas law mandates that the state insurance commissioner completes a review of such requests within thirty days.

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Aetna Suspends Rate Hike in California

April 28th, 2011 by Iris | Comments Off | Filed in health insurance, rate watch

Following in the footsteps of Anthem Blue Shield and PacifiCare, Aetna Inc. has become the third major health insurance company in California to announce that it was stepping back from its proposed rate increase there. Now, instead of roughly 43,000 Aetna policyholders being handed a rate hike of 17.9%, their insurance will go up only 12.2%. This decision came after the insurer agreed to postpone any increase to July 1, in response to a request from Dave Jones, the California Insurance Commissioner.

The reduced rate increase will likely save Aetna’s policy holders $6.7 million in premiums, and, according to Mr. Jones, the sixty-day delay added another $1 million to that savings.

Aetna isn’t reducing its rate increase without protest, however. The insurance company maintains that the rising cost of medical care is necessitating an increase in health insurance costs, and that a limit on the company’s ability to raise rates could be detrimental to its future. Addressing this in a statement, a representative of the company wrote, “Long term, our financial viability in the individual health insurance market in California could be impacted by the inability to implement rates which adequately address the rising cost of health care services in the state.”

Commissioner Jones also made a statement about Aetna, saying, “Aetna policyholders will benefit from Aetna’s decision to lower their proposed July 1 rate increase. Aetna has agreed to a reduction of their most recent increase, but Californians have experienced unsustainable health insurance increases year after year and they want me to have the authority to reject excessive rate increases. A.B. 52, which would give me that authority, passed out of the Assembly Health Committee this week.”

The announcement from Aetna represents the latest success in Jones’s push to expand the regulatory role of his office in the health insurance market.

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Ratewatch: Allstate to Raise Rates in Mississippi

April 12th, 2011 by Iris | Comments Off | Filed in homeowners insurance, rate watch

According to the Mississippi Insurance Commissioner, Mike Chaney, Allstate customers in that state will be seeing a 19.4 percent increase in their homeowners insurance rates. The increase is likely to happen in June, and apply to both renewals and new policies.

For nearly two years, Chaney has been in negotiations with Allstate about the size of this increase, which, when filed, was a ridiculously high 65 percent. That increase, along with the reduced request for a 44% rate hike, was rejected.

In 2006, after Hurricane Katrina, then-Insurance Commissioner George Dale approved Allstate’s request for a 29.5 percent increase which also came with a 90% increase in the state’s three coastal counties. That rate-raising was followed by a 14 percent hike approved by Chaney in 2008, though that was an average, and coastal homeowners actually saw their insurance go up by about 40 percent at that time.

Then, in late 2009, Chaney declared that he would only accept rate increases that were proposed statewide, rather than those broken down by property zone (i.e. inland vs. coastal locations).

In the most recent negotiations, Allstate threatened to drop 18,000 policyholders from their book of business unless the 44% increase was allowed, but after more back-and-forth, the insurer agreed to drop only 5,000 policies in Mississippi, no more than 150 of which are in coastal locations, and then only after a year passes.

A representative of Allstate said that any homeowners insurance customers who also have (or move) their auto policies to Allstate will not be dropped, and will also receive a 25% discount, which is ten percent more than the previous discount of 15%.

In a statement to the press, Chaney said, “This has been a painstaking process, and as commissioner, I worked diligently to negotiate the requested rate down to a 19.4 percent increase to the policyholder. I earnestly believe I have arrived at the most equitable solution possible, while carefully balancing the percentage of increase granted with the number of non-renewals by Allstate throughout the state.”

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Rate Watch: State Farm Requests 27.7% Rate Hike in Florida

February 2nd, 2011 by Iris | Comments Off | Filed in homeowners insurance, rate watch

The Florida Office of Insurance Regulation will be holding a public hearing on February 15th. Why? To discuss the latest rate filing from State Farm, which company is requesting an average increase of 27.7 percent statewide in homeowners insurance rates. The reason, they say, is to offset the rising costs of sinkhole claims. The request is coming just as the Florida legislature is attempting to negotiate how to address the cost of sinkholes, as it prepares for its new legislative season beginning on March 8th.

Chris Neal, a spokesperson for State Farm said that the increase in the insurance company’s non-catastrophe losses, which have increased by 94 percent over the last three years, is one of the key factors that led to the rate request. He said that the vast majority of that increase is because of sinkhole losses. In 2007, for example, the carrier paid out $47 million in sinkhole claims while they paid out more than $119 million in similar claims in just the first three quarters of 2010.

Neal said, “The way things are going we may have to consider sinkholes a catastrophic loss.”

This rate filing is merely the most recent move in a dance that the State of Florida has been doing with State Farm for several years, after a deal was reached to keep the insurer in the state. Two years ago, State Farm threatened to leave Florida entirely, after its request for a 47% increase was rejected. At that time, rather than letting 800,000 policyholders get “dumped,” the state regulators agreed to a deal allowing the insurer to drop 125,000 customers, reduce or eliminate certain discounts, and increase rates by 14.8 percent.

That agreement, said Neal, helped State Farm stabilize its finances. “It gave us some rate relief and allowed us a way to manage our expenses that was critical at the time,” he said.

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California Insurance Commissioner Asks Blue Shield to Delay Rate Increase

January 6th, 2011 by Iris | Comments Off | Filed in health insurance, rate watch

According to a report in the Insurance Journal, California Insurance Commissioner Dave Jones has asked Blue Shield of California to hold off on its next round of substantial premium increases that would affect tens of thousands of individual health insurance policyholders in the Golden State. Once that rate increase goes through, some of those customers could see health insurance rates increase up as much as 59%, the state Department of Insurance said.

Blue Shield is seeking rate increases that would result in a cumulative increase that would average more than 30% over a five-month span for roughly 200,000 policyholders, according to reports distributed by the Associate Press. The next increase is to go into effect on March 1st of this year, assuming California regulators approve it, to follow other increases that went into effect on October 1, 2010 and January 1st, according to a report in the Los Angeles Times.

If the newest rate hike is approved, roughly 195,000 Blue Shield customers would see their premiums go up an average of 30-35%.

In a statement to the press, Commissioner Jones said, “I find it stunning that Blue Shield would seek to impose such massive premium increases on policyholders during these troubling economic times. These premium increases will impose significant financial burdens on struggling families and, in some cases, will lead to the loss of health care coverage altogether.”

Jones also sent a letter calling on the insurer to delay their rate increase for at least sixty days beyond the proposed March 1 effective date. Under current California law, the Insurance Commissioner cannot reject excessive premium increases outright, but by asking for a delay from Blue Shield, he hopes to ensure that all proposed increases have been thoroughly reviewed.

Blue Shield points to the rising cost of health care as the impetus for increasing their rates. “We raise rates only when absolutely necessary to pay the accelerating cost of medical care for our members,” the company told customers last month.

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Insurance Costs Less in Ohio

December 7th, 2010 by Iris | Comments Off | Filed in auto insurance, homeowners insurance, rate watch

A bunch of my friends from places like California and Texas have recently relocated to various cities in Ohio. Being someone who has fulfilled her obligations to the winter weather several times over, it’s been difficult for me to comprehend why anyone would want to move there.

A recent story that the Insurance Journal shared, however, explained some of the appeal. Apparently, insurance costs a lot less there. Specifically, at least according to data provided by the Ohio Insurance Institute (OII), Ohio drivers pay about $167 less than the national average for their car insurance, and Ohio homeowners are charged about $226 less than the national average to insure their homes.

The numbers for homeowners insurance are based on data from 2008 that was released by the National Association of Insurance Commissioners (NAIC) last month, and the auto insurance details are based on data from 2007 released a year ago this month.

In 2008, Ohio homeowners spent an average of $565/year as opposed to the national average of $791 for homeowners coverage, while the average auto insurance cost in 2007 for Ohio drivers was $628 as compared to the U.S. average of $795. Ohio has the eleventh lowest average auto insurance rates in the United States, while it ranks seventh lowest for homeowners insurance. The averages are based on the specific types of coverage that homeowners in each state typically purchase.

The Ohio Department of Insurance says that between 2005 and 2009 homeowners insurance in Ohio had average premium increases of 3.6 percent/year, while, during the same period, auto insurance premiums showed an average decrease of 0.3 percent/year.

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