On July 28th The Dallas Morning News reported Farmers Insurance was seeking to raise home insurance rates an average of 15% statewide. This was Farmers second increase for 2012. The first homeowners increase was announced on March 16 and was an average of 10%. If the Texas Department of Insurance accepts the second increase, the combined average increase will be 25%.
On September 8th, it was reported that State Farm is seeking a 20% rate hike for homeowners. This increase follows another increase for policy holders that went into effect in December of 2011. Consumer representatives put the combined rate hikes at 31.5% since last fall.
State Farm and Farmers are not the only two companies that have raised home insurance premiums. I’m not aware of any that haven’t. What’s causing everyone to experience such large increases or perhaps a second increase? Most companies point to three events in the past 18 months that contribute to the increases;
- The record breaking wildfires in 2011
- Almost 4 million acres burned
- Over 1,600 homes were lost
- Insurance losses for home & auto surpassed $250 million
- The two storms that struck North Texas this year
- There was the April tornados & hail
- The June hail storm
- Combined, these two storms estimated claims paid was $2.25 to $3.0 billion
- Hurricane Isaac’s initial claims estimate was less than $1.5 billion
I think that rates will remain high the next year or two but begin to decline if Texas avoids more major catastrophic losses due to hurricane, hail, tornados or fire. What can you do in the interim?
- Review your renewal when it comes in the mail.
- Talk with your agent and make sure you have enough coverage and are taking advantage of all the discounts you are able to utilize.
- Find out if rewriting your policy will save you money – in some cases this may reduce your premium.
- Compare with other companies
- As an independent insurance agent, we review each client’s renewal to see if we can save them money either with their existing company or with another company.
Have a question about your home or car insurance? Post it in the comments section or on our Facebook page and we’ll answer it for you! We’ll provide a no obligation quote and explain it too!