NU Online News Service, Dec. 16, 3:09 p.m. EST
The frequency of claims arising from wind and hail in Texas has prompted two Allstate Insurance companies to ask regulators for rate increases.
Allstate Texas Lloyds is asking for a 5.4 percent rate increase. Allstate Fire and Casualty Insurance Company filed to raise rates 9.7 percent.
Allstate spokeswoman Kristen Beaman said loss costs have outpaced premiums, as the price of construction materials–especially for roofing–and labor have increased.
Actuaries at the Texas Department of Insurance (TDI) are currently reviewing the filing, said spokesman Jerry Hagins. The state has a file-and-use rating system but regulators can order refunds if they deem rate increases too high.
On Jan. 19 State Farm Lloyds will meet with regulators in front of a judge to explain why it should not refund $310 million to policyholders as was ordered by Insurance Commissioner Mike Geeslin late in 2009.
The commissioner said the state's largest homeowners insurer has been overcharging customers since 2003. TDI and State Farm have been at odds over rate increases for seven years.
TDI continues to review a July 2009, State Farm Lloyds filing for an 8.8 percent increase in its homeowners premium rates and another filing for a rate increase of 4.5 percent made in March.
The insurer and TDI have sparred in court over the rate hikes. At one point Commissioner Geeslin attempted to hold State Farm to prior approval for rate increases.
State Farm has said it owes no refunds. The insurer has likened the refund order to the losses the company incurred from Hurricane Ike in 2008.
According to Highline Data, State Farm and Allstate ranked first and third in 2009 among writers of homeowners multiperil insurance in Texas, with market shares of 29 percent and 13.1 percent, respectively. Zurich Insurance Group is second with 13.6 percent of the market.
Highline Data is part of Summit Business Media, which includes National Underwriter.
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