Minden Press-Herald

Wednesday
Oct 01st

State Farm Insurance to raise premiums

Louisiana's largest insurer of homes has received permission to raise rates by an average 7.8 percent. State Farm Fire and Casualty Co. customers in Webster Parish can expect an average 19.5 percent increase, one of the largest in the state.

State Farm spokeswoman Molly Quirk told The Associated Press on December 7 that the $32.2 million increase goes into effect with new policies on Feb. 15, 2012 and renewal policies on April 1. Rates will rise depending upon where homeowners live.

"Insurance rates are based on trends and losses," Quirk wrote in an email to Minden Press-Herald. "The cost of labor and materials continue to increase and our rates have to reflect those trends.

"We are also seeing a lot more non-hurricane related claims (such as tornados, hail storms, along with everyday claims) in (Webster) and our projections show that this will continue to increase," Quirk continued.

Although most coastal areas are in for increases, Webster joins northeastern Louisiana parishes around Monroe with the largest jump of 19.5 percent. Rapides Parish, including Alexandria, is in for a 13.9 percent hike.

State Farm has about 301,000 policyholders in Louisiana. State Farm received a 9.9 percent increase last year after requesting 19.1 percent. In 2009, the insurer received an 8.3 percent hike after requesting 13.7 percent.

In March, Insurance Commissioner Jim Donelon rejected a State Farm request for an average of 14.3 percent in homeowner's rates, saying it was not justified. State Farm came back with an 8.5 percent rate increase request that Donelon cut to 7.8 percent, said Insurance Department spokeswoman Lori Cherry.

According to state figures, State Farm has 28.6 percent of Louisiana's homeowner insurance business, followed by five companies owned by Allstate Corp., which have 22 percent of the business, or about 164,000 policyholders.

The Allstate companies last received rate increases ranging from 2.9 percent to 11.6 percent, depending upon which company carried the coverage, in August 2010.

Insurance companies are not granted rate increases based upon prior losses, such as damage from four major hurricanes that have hit Louisiana in recent years. Instead, the rates are supposed to be set on projections of losses using complicated mathematical models.

Among various regions of the state:

n State Farm policyholders in Orleans and Jefferson Parish will see average increases of 7.5 percent.

n Policyholders in the Shreveport-Bossier City area are in for average increases of 5.5 percent.

n State Farm customers in East Baton Rouge and West Baton Rouge parishes will get average increases of 7.4 percent.

n Calcasieu, Lafayette and St. Tammany parishes are slated for 6.9 percent increases.

n One area consisting of Avoyelles, East Feliciana, St. Helena and West Feliciana parishes will see rate decreases averaging 3.7 percent.

n Other Louisiana coastal areas are in for rate increases ranging from 7.5 percent to 15.6 percent.

 

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