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Louisiana Insurance Commissioner Denies State Farm's 16.6% Homeowners Increase Request

Source: Advertiser.com


Posted on 07 Feb 2013 by Neilson

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State FarmLouisiana Commissioner of Insurance Jim Donelon Monday rejected State Farm Fire and Casualty Co.'s request to hike its homeowner insurance rates 16.6 percent.

Donelon said the increase would have affected more than 300,000 policyholders and provided an estimated $71.3 million in additional premiums to the company.

Donelon said that after an extensive review, the increase could not be justified.

"There were a number of variables factoring into the decision to deny this request and the actuarial support was lacking prompting concerns regarding the magnitude of the profit provision," said Donelon.

"Additionally, State Farm's trend selections did not appear in line with actuarial data and that raised additional questions."

The company received a rate hike of 7.8 percent Feb. 15, 2012. It originally asked for 14.3 percent but it was declined.

State Farm Fire and Casualty Company is the largest homeowners policy provider in the state. As of December, it had a market share of 28 percent of all Louisiana homeowner policies.

Last week, Donelon rejected State Farm's request to assess regional named storm and hurricane deductibles.

Legislation passed in 2008 allows insurers to apply to the commissioner for different deductibles for different parishes.

The maximum would require that 4 percent of a home's insured value come out-of-pocket before the insurance would kick in.


Comments

 
MISSLA. Feb 7 2013 12:32PM Report Abuse
I AM PLEASED WITH THE COMMISSIONER'S DECISION,CONSIDERING WE HAVE A 1 OR 2 PERCENT DED. ON HOMEOWNER POLICIES NOW IT SHOULD BE EASY TO UNDERSTAND WHY A 4% DED. IS TOO DRASTIC OF AN INCREASE ON HURRICANE DED. ALSO, WITH A 5-10 PERCENT DED. ON EARTHQUAKES,ID SERIOUSLY CONSIDER MY OPTIONS BEFORE MOVING TO ONE OF THOSE STATES.
The Old Guy Feb 7 2013 10:43AM Report Abuse
4% deductible for hurricane losses? Not too bad when you are one or near the shore of ther Gulf. Maybe the people in Louisiana should hear about Earthquake deductibles in California, Missouri, Kentcky, Illinois and Indiana that range from 5% to 10% of the homes value. Makes 4% sound not too bad.
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