Farmers to Reduce Rates for Family Home Policy in Texas

The Texas Department of Insurance, the Office of Public Insurance Counsel and Farmers Insurance Company have reached a settlement in a dispute over a homeowners insurance rate increase filed by Farmers in June 2009.

Farmers had filed a 9.8 percent rate increase for its Texas Family Home Policy, which became effective June 16, 2009. OPIC subsequently filed an objection to the rate increase and in September, TDI notified the company that it found the “rates contained in the filing to be excessive and unfairly discriminatory.”

A commissioner’s order dated Jan. 11, 2010, indicates the parties have agreed that Farmers will reduce the overall Texas Family rate increase by 5.3 percent by: “(1) reducing main peril base rates by 2.7 percent, (2) increasing the auto and home discount applicable to main perils from 15 percent to 20 percent, and (3) reducing the water peril base rates by 11.6 percent.”

The change is to become effective March 16 and remain in effect until March 16, 2011, absent the occurrence of “extraordinary unforeseen circumstances,” such as a natural catastrophe, that might negatively affect the company.

Expressly noted in the commissioner’s order are stipulations that the order neither constitutes an approval by TDI “of the assumptions or methodologies used by Farmers in any rate filing,” nor does it mean that Farmers admits to any violations of the Texas Insurance Code.

Topics Texas Pricing Trends Agribusiness