Allstate will be charging Mississippi homeowners an average of 19.4 percent more for insurance, and State Farm received approval for an average 18.8 percent rate hike in Florida.
The Mississippi Insurance Department (MID) confirms Commissioner Mike Chaney approved the increase for Allstate, which originally requested a 65 percent average statewide increase for homeowners' insurance last year.
Chaney denied Allstate's first request and a subsequent request for a 44 percent rate hike. The commissioner said he would not approve the filing without a court order.
The new rate is expected to take effect in June. It marks the end of some contentious haggling over rate increases between Chaney and Allstate.
Chaney accused the insurer of trying to price its way out of Mississippi and said Allstate was asking policyholders to make up for "management mistakes." He added that Allstate's catastrophe model has never been proven to be correct and an actuarial report concluded the insurer was not due for more than an 18 percent increase.
Allstate fired back, saying that another actuarial report commissioned by MID found that the rate hike was appropriate and reflected Allstate's increase in non-hurricane and non-wind-related claims and claim costs. The insurer had requested a hearing, which would have been the first in MID's history on a rate denial.
Chaney could not immediately be reached for comment.
With an 11.8 percent market share, Allstate was the third-largest writer of homeowners' multiperil insurance in Mississippi in 2010, according to Highline Data. State Farm is the largest with 25.5 percent, and Southern Farm Bureau is second with 16.4 percent.
Highline Data is a part of Summit Business Media, which also owns NU.
THE SUNSHINE STATE
In Florida, a statement by Florida Insurance Commissioner Kevin McCarty says, "The amended rate filings by State Farm accepted by the office today are reflective of both a rate need by the company as well as cost-drivers in the system. State Farm provided actuarial support for these new rates through data submitted in its amended rate filing, and through responses to [Office of Insurance Regulation] questions during the public hearings conducted on Feb. 15 in Tallahassee."
The insurer submitted two rate filings in December.
One filing asked for a rate hike of 27.9 percent, impacting 570,423 policies for dwellings (homeowners-HO3), tenants (HO4) and condo-unit owners (HO6). In those areas, the filed increase percentages and final accepted percentages are:
• HO3, a filed increase of 28.4 percent, accepted effect increase of 20 percent.
• HO4, a filed increase of 5.8 percent increase, accepted decrease of 15 percent.
• HO6, a filed increase of 19.3 percent, accepted decrease of 3 percent.
State Farm's second filing involved commercial-multiperil residential, where the property owner is not the occupant. The initial filed rate effect was a 95.7 percent increase, impacting 40,137 policies. The final accepted rate effect is a 62.1 percent increase.
The approved rate hikes for all coverages will take effect June 1 for new business and July 15 for renewal business.
The rate hikes come in the midst of a contentious property-insurance battle at Florida's legislative session. Lawmakers are debating several property-related bills that will impact State Farm, its competitors and Florida's largest property insurer, the state-mandated Citizens Property Insurance Corp. Under discussion are sinkhole coverage requirements, changes regarding how much an insurer has to pay out for damages to a home and personal contents, time limits on homeowner claims, the process for future rate hikes, constraints on public adjusters, and major changes at Citizens in terms of eligibility requirements and rates.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.