Posted on 08/21/2007 6:53:13 PM PDT by Dubya
State insurance regulators said Tuesday they have disapproved Allstate Texas Lloyd's latest home insurance rate hike of 5.9 percent, calling it excessive.
The company also from now on must file its rates for approval before they can be implemented.
Most companies can implement rates upon filing them with the state, under the ``file and use'' system put into place in late 2005. If the insurance commissioner deems the rates excessive after they've been implemented, he can order the company to pay refund along with interest.
Allstate is still reviewing the order to determine if it will appeal or if it will continue to implement the hike, spokesman Bill Mellander said.
"It doesn't change our position," he said, adding that the insurer thinks its rates are justified and competitive.
Monday, Allstate implemented a 5.9 percent hike as well as an additional average 2 percent increase in counties once and twice removed from the Gulf of Mexico, such as Harris and Montgomery counties. Last month, the company withdrew a proposed 6.9 percent rate hike last month when regulators signaled they wouldn't approve that increase.
The documents justifying the latest rate hike looked similar to the ones supporting the withdrawn increase, said Ben Gonzalez, a spokesman for the Texas Department of Insurance.
"It's still excessive and there's not enough supporting information," he said.
Read more in tomorrow's Chronicle.
purva.patel@chron.com
Oh darn!
Allstate has several billboards in the Houston area that are in Spanish. Maybe some of their illegal alien customers are high risk!
Allstate’s been doing some strange things down here in Texas. Thankfully, the state regulators have been smacking them down on a regular basis.
If they keep this up, there’s every chance they’re going to get kicked out of the state again.
That could be. :^)
I find it interesting the State can them before they could a customer. Allstate the good hands people? The wash their hands after the first claim.
I think people forget that Insurance companies exist to make a profit. For an insurance company to make that profit, they have to collect more in premiums than they pay out in claims. Quite simple.
Despite their claims, they do not exist to “help” people. They use the avenue of insurance (betting on/against loss) as the means.
When an insurance company looks to raise premiums, that is a clear indication that they made some bad wagers. State insurance regulators exist to prevent them from going beyond to gouge consumers for extra profits.
Now - is Allstate trying to gouge or simply to control loss? That is the question. Apparently the Texas Insurance Commission thinks they are going beyond...
ALLSnake Insurance!!
Since I needed new insurance on that home, I started getting quotes on both houses and cars. Found out I had been grossly overpaying on my car insurance. Quickly switched all my insurance.
So Allstate will not have to worry about potential losses from me, but then again they have lost a stable stream of revenue forever. I'm sure there are others that have done the same.
Part of doing business in Texas (and many other states) is that you have to abide by the state insurance regulatory board.
My personal opinion is - premiums should be directly tied to the actual risk involved in insuring the property/individual. If I choose to build a home on the beach, my homeowner’s insurance (and flood insurance) should be higher than if I built the same house much farther inland - because the catastrophic risk is lower.
Just like my current homeowner’s insurance costs more where I live than it would if the same hose were closer to town. The reason - fire protection in much more limited out here in the sticks. That is my choice.
And insurance companies do often take advantage of situations and gouge consumers - particularly when someone is in a position to not be able to get other insurance.
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