Allstate, Others Reduce Texas Home Rates
NU Online News Service, Sept. 8, 1211 p.m. EDT?Homeowners insurers in Texas have started agreeing to rate reductions Insurance Commissioner Jose Montemayor is seeking pursuant to a state law mandating a homeowners insurance rate rollback.
On Wednesday, Nationwide, Safeco, Consolidated and Republic agreed to rate reductions ranging from 12 to 20 percent. About 20 insurers, including State Farm, one of the two largest homeowners insurers in the state, have opted for a hearing to argue against proposed rate decreases.
State Farm is currently awaiting the results of a Sept. 2 hearing.
Allstate last week reached agreement with the department to cut Texas rates by 10.1 percent. The department was originally asked for an 18.2 percent reduction.
Next year in August, under the department's agreement with Allstate, the insurer will issue credits or refunds of an additional 8.75 percent.
The reductions by insurers were required after the June 2003 passage of S.B. 14, which required the Texas Department of Insurance to review the homeowners rates of the top 32 insurers in the market and order reductions where appropriate. Following an actuarial analysis of the insurers' rates, 24 of the 32 were ordered to decrease rates by a low of 1.5 percent for Texas Farm Bureau to a high of 31 percent for Hanover.
The Department estimates that the reductions will save Texas homeowners approximately $500 million annually.
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