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Wednesday, July 8, 2009

Allstate home insurance rates to jump 5.5 percent statewide

Allstate home insurance rates to jump 5.5 percent statewide
July 7, 2009, 3:05PM
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Nearly half a million Allstate Texas Lloyds customers will see home
insurance rates go up a statewide average 5.5 percent starting in late

Texas homeowners living closer to the coast will see higher rate hikes.
Harris County rates, for instance, will jump and average 15.6 percent and
Galveston’s will rise an average 9 percent.

The company has notified state regulators about its plans to impose the new
rates on policies that come up for renewal starting Aug. 27.

“We’re committed to ensuring both for our agencies and our consumers that
our rates are in fact competitive. It’s important to us that we do that in
a responsible manner and that means making sure we are not just offering
the right products for our consumers but that we are doing it at the right
price,” said Bill Mellander, an Allstate spokesman.

Allstate needs the recent increase because of climbing claims costs, he

For example, the costs of materials and labor for roof claims have
increased more than 60 percent over the last 18 to 24 months, he said.

Homeowners along the coast will get hit with bigger rate increases because
the company is paying more for reinsurance, coverage it buys to pay claims
during hurricanes and other catastrophes.

The rates also account for losses from Hurricane Ike, for which the company
paid out $666 million net of reinsurance.

Insurers use historical claims loss figures, among other factors, to
project the rates they will need to cover future payouts.

Regulators are reviewing the rates and can order refunds, plus interest, if
they deem the increase unjustified, said Jerry Hagins, a spokesman for the
Texas Department of Insurance.

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