Insurance Co. Hikes Rates in Parker County
The Weatherford Democrat—August 16th, 2010
Homeowner’s insurance in Parker County has been raised for some residents, not once, but twice in a year.
State Farm Insurance has raised its homeowner insurance rates twice in six months and for Parker County, the price has increased from $1,617 to $1,786.
Jerry Hagins, a spokesman for the Texas Department of Insurance, which keeps track of rate regulations and complaints, said two rate hikes in six months is too frequent and communicated that to State Farm.
“We are in review of those rates and that review is open and has not been completed,” Hagins said.
The reason for the rate increase is because Texas is different than other states because of weather related occurrences, and Parker County is not “unique” in the rising cost in the state, State Farm spokesman Kevin Davis said.
“We have eight different types of natural disasters in our current state,” he said. “Insurance is prospective so we have to look at trends.”
State Farm maintained its rate cost for five years throughout natural catastrophes like hurricane Rita, Ike and Gustav.
“Rate increases are not just subject to catastrophes, and with the uprising costs of building materials and labor, insurance companies make predictions about costs and make adjustments in order to meet future obligations,” Davis said.
The rise in cost of homeowners insurance raises serious questions about the stability of the market, and a company as large as State Farm could destabilize the market and encourage other companies to follow suit, said Alex Winslow, executive director of Texas Watch, an advocacy group for residents in the state.
“State Farm is the bully on the block,” Winslow said. “They’re the largest carrier in our state and they have continually thrown their weight around to bully and intimidate the state Department of Insurance and unfortunately for consumers they’ve gotten their way by and large.”
Winslow said consumers deserve a level of protection against raising rates, and State Farm could still make a healthy reasonable profit if the company submitted its rates before imposing them on state homeowners.
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