June 7th, 2010
AUSTIN – State Farm, the state’s largest homeowners insurance company, is currently implementing a second statewide rate hike in less than a year. According to sample rates released by the Texas Department of Insurance, State Farm customers in Texas will see increases of up to 39%. Check out what State Farms double rate hike means for your community.
| CITY | Rate Before Increases | Rate After Increases | Percent Increase |
| Abilene | $1,642 | $1,847 | 12.5% |
| Alpine | $1,549 | $1,984 | 28.1% |
| Amarillo | $1,657 | $1,859 | 12.2% |
| Angleton | $980 | $1,305 | 33.2% |
| Angleton | $2,254 | $3,012 | 33.6% |
| Austin | $1,188 | $1,318 | 10.9% |
| Beaumont | $2,254 | $3,012 | 33.6% |
| Big Spring | $1,565 | $1,917 | 22.5% |
| Brownsville | $2,053 | $2,848 | 38.7% |
| Brownwood | $1,548 | $2,137 | 38.0% |
| Cleburne | $1,548 | $2,137 | 38.0% |
| College Station | $1,214 | $1,341 | 10.5% |
| Conroe | $1,312 | $1,368 | 4.3% |
| Corpus Christi | $2,357 | $2,979 | 26.4% |
| Corsicana | $1,505 | $1,786 | 18.7% |
| Dallas | $1,506 | $2,014 | 33.7% |
| Del Rio | $1,068 | $1,358 | 27.2% |
| Denton | $1,625 | $1,993 | 22.6% |
| Dumas | $1,657 | $1,859 | 12.2% |
| El Paso | $787 | $880 | 11.8% |
| Fort Stockton | $1,485 | $1,889 | 27.2% |
| Fort Worth | $1,445 | $2,012 | 39.2% |
| Freeport | $2,376 | $3,177 | 33.7% |
| Gainesville | $1,782 | $1,968 | 10.4% |
| Galveston | $2,292 | $3,196 | 39.4% |
| Greenville | $1,841 | $2,289 | 24.3% |
| Houston | $2,422 | $3,341 | 37.9% |
| Kerrville | $1,068 | $1,358 | 27.2% |
| Killeen | $1,101 | $1,216 | 10.4% |
| Laredo | $1,068 | $1,358 | 27.2% |
| Liberty | $2,051 | $2,313 | 12.8% |
| Longview | $1,301 | $1,543 | 18.6% |
| Lubbock | $1,495 | $1,981 | 32.5% |
| Lufkin | $1,505 | $1,786 | 18.7% |
| Midland | $1,565 | $1,917 | 22.5% |
| Mineral Wells | $1,965 | $2,170 | 10.4% |
| Mission | $1,983 | $2,366 | 19.3% |
| Nacogdoches | $1,301 | $1,543 | 18.6% |
| Odessa | $1,489 | $1,825 | 22.6% |
| Orange | $2,051 | $2,842 | 38.6% |
| Palestine | $1,581 | $1,875 | 18.6% |
| Paris | $1,841 | $2,289 | 24.3% |
| Pecos | $1,485 | $1,800 | 21.2% |
| Plainview | $1,523 | $1,886 | 23.8% |
| Plano | $1,707 | $2,093 | 22.6% |
| Port Lavaca | $2,164 | $3,001 | 38.7% |
| Round Rock | $1,214 | $1,341 | 10.5% |
| San Angelo | $1,489 | $1,825 | 22.6% |
| San Antonio | $1,275 | $1,426 | 11.8% |
| Sherman | $1,841 | $2,289 | 24.3% |
| Sweetwater | $1,726 | $2,115 | 22.5% |
| Texarkana | $1,841 | $2,289 | 24.3% |
| Tyler | $1,239 | $1,469 | 18.6% |
| Vernon | $1,858 | $2,258 | 21.5% |
| Victoria | $1,983 | $2,366 | 19.3% |
| Waco | $1,532 | $1,628 | 6.3% |
| Weatherford | $1,617 | $1,786 | 10.5% |
| Wichita Falls | $1,604 | $1,949 | 21.5% |
Source: Texas Department of Insurance
In a letter to State Farm, Insurance Commissioner Mike Geeslin asked the company to withdraw this latest rate increase because it “may indicate a lack of ratemaking discipline and lead to market instability.” The commissioner added that State Farm’s steep rate hikes could encourage “other companies [to] follow suit which would lead to further market instability.” State Farm has refused to withdraw or amend its rate filing and is moving forward with the rate hike.
“State Farm is using its size to bully the insurance commissioner, the legislature, and its customers,” said Alex Winslow, executive director of Texas Watch, a statewide citizen advocacy group representing insurance consumers. “Enough is enough. Texans need and deserve comprehensive insurance reform that reins in the insurance industry’s bullying, requires insurance companies to justify their rate hikes, and holds them accountable to their customers.”
State Farm has been dragging state regulators into court since 2003 in a dispute over its rates. All the while, the company’s customers have been forced to pay rates that state regulators believe are excessive. According to the state Office of Public Insurance Counsel, State Farm owes its customers approximately $1 billion in overcharges and penalties. Instead of complying with an insurance department order to refund a portion of those overcharges, State Farm is once again going to court. Meanwhile, it has increased rates yet again.
Texas lawmakers have an opportunity to address insurance company abuses by enacting insurance reforms that include:
•Streamlined Prior Approval. Give the insurance commissioner an opportunity to review rates before – not after – they are imposed on Texas homeowners. This improved consumer protection is the single most important step lawmakers can take toward improving our market for consumers. It would guarantee that the insurance commissioner has the ability to protect Texas homeowners from rate hikes he believes are unfair or unwarranted.
•Ending Unfair Insurance Practices. Insurance companies should no longer be allowed to use credit scoring and data mining, which are fraught with errors, do not accurately reflect a person’s risk, and are riddled with the potential for abuse. Plus, the insurance industry’s deny-first mentality must be stopped.
•Simplifying Insurance Policies. Consumers have no way to effectively shop the Texas insurance market because it is too complex and confusing to allow true consumer choice. Give consumers more control over their insurance decisions by empowering them to effectively compare different options.
“For far too long, the insurance industry has been allowed to dictate the terms of the market,” said Winslow. “No insurance company should be too big to regulate. Texas insurance customers deserve a basic level of protection that allows them an opportunity to create real competition in the insurance market.”
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