Filed Under:Markets, Personal Lines

Fires, Weather Prompt Allstate to Seek Rate Hikes in Texas

NU Online News Service, Dec. 21, 1:33 p.m. EST

Allstate insurance companies have requested rate increases for homeowners’ insurance in Texas due to the “risks and realities of weather patterns in Texas,” a spokeswoman says.

Allstate Texas Lloyds has asked for a 5.7 percent average statewide increase. Allstate Fire & Casualty Insurance Co. is seeking approval for a 9.8 percent rate hike.

Texas is a file-and-use state, so the rates are currently in effect. Insurance regulators are reviewing the request.

Allstate spokeswoman Kristen Beaman says the rate request is “driven by loss costs, which are outpacing premiums.”

“Texas has the most severe weather in the country,” Beaman points out in an email. “Hail and windstorms have been increasingly severe over the past few years and severe drought conditions have increased the frequency and scope of wildfires.”

Allstate reported losses of $1.1 billion from the 2011 third quarter, when large wildfires burned in Austin and Houston. Wildfires were included as part of 23 catastrophic loss events during the quarter, which also saw losses from Hurricane Irene and Tropical Storm Lee, Beaman says.

Due in no small part to catastrophe losses, Allstate Corp. reported third quarter net income of $165 million, a 55 percent drop compared to the same period in 2010.

The Insurance Council of Texas says wildfires this year could cause insured losses of around $500 million. This year Texas was victimized by the costliest and second-costliest fire in state history.

The costliest, the Bastrop fire, is now expected to cause $325 million in insured losses.

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