State Farm Fire & Casualty Co. has asked regulators in Louisiana to approve a proposed 8.5% increase for homeowners insurance rates in the state. The hike would affect more than 301,000 policyholders and bring in more than $32.7 million for the company each year.
State Farm, the largest writer of homeowners insurance in Louisiana, has asked that the increase be put into effect on Aug. 15 for new policies and on Oct. 1 for renewed policies.
The company's request follows an earlier rate increase request State Farm made in March that was ultimately rejected by Louisiana Insurance Commissioner Jim Donelon. In March, State Farm asked regulators to approve a hike that would have raised rates by an average of 14.3%. Donelon determined the request was excessive.
The most recent request also marks the third time in as many years State Farm has requested a hike in the state. The company received a 9.9% increase in 2010 after having a previous 19.1% request was rejected. In 2009, State Farm received an 8.3% hike after requesting 13.7%.
Molly Quirk, a State Farm spokeswoman, said the recent rate boosts will help ensure the company's long-term viability in Louisiana. "We're always reviewing out business, looking at the long term and the big picture," Quirk said. "We think this request is a step in becoming more rate adequate here in Louisiana, so we can be here for our customers in the long term."
Quirk said the move would affect homes, condominiums and renters' policies in the state. She did not provide a breakdown for how policyholders would be affected in different parts of the state, saying that under Louisiana law, that information is confidential while the commissioner's office reviews the proposed rate increase.