State Farm Sues TDI; Files to Increase Homeowners Rates in Louisiana

State Farm Fire and Casualty Co. filed a lawsuit against the Texas Department of Insurance after the state agency took the unprecedented move of publicizing on its Web site recent rate hike proposals by the company.

Texas’ largest insurer filed suit, seeking to protect from disclosure certain information that State Farm said could benefit its rivals in the insurance industry. Department spokesman Jerry Hagins says the agency’s position is that all documents associated with a rate filing are public information. Posted were two State Farm rate proposals filed over the last eight months that increase homeowner premiums an average of 13 percent.

The company also has filed an average 9.9 percent rate increase request for homeowners coverage in Louisiana, according to the Associated Press. The company has more than 300,000 policyholders in Louisiana.

In February, Insurance Commissioner Jim Donelon rejected the company’s request for an average 19.1 percent rate hike. Donelon said that increase would be unreasonable.

State Farm received an average 8.3 percent increase last year in Louisiana after asking for 13.7 percent. Although the average rate hike would be 9.9 percent, hurricane-vulnerable coastal areas would bear the brunt. The New Orleans region would see a 17.7 percent increase while rates in the Lake Charles region would go up 22.5 percent, said State Farm spokeswoman Brooke Cluse.

The company has been embroiled for years in disputes over its homeowners rates in Texas. In November 2009, TDI ordered State Farm Lloyd’s (SFL) to refund a total of $310 million to policyholders after finding that the insurer had overcharged customers beginning in 2003.

State Farm subsequently appealed the order, which halted repayments until the courts resolve the case.

Topics Lawsuits Trends Texas Louisiana Pricing Trends Homeowners