Homeowners Insurance Rates Going Up in Alabama

Insurance rates are going up for many Alabama homeowners.

Officials with three of the four companies that insure the most homes in Alabama say that they are raising rates.

The company that sells the most homeowners insurance in Alabama, State Farm, said the rate increase is needed to ensure it can pay future claims. Officials with Alfa, and Farmers Insurance Group also say they are raising rates. Alfa has the second most insurance customers in Alabama and Farmers is fourth.

The average rate increases planned by insurance companies in Alabama range from about 6 percent to about 26 percent. For State Farm customers, the rate increase for new businesses will take effect Nov. 1 and Jan. 1 for existing customers.

The amount of the increase will vary depending on where customers live and most State Farm customers living in Mobile and Baldwin counties in south Alabama will not receive a rate increase.

The Alabama Department of Insurance has approved the rate increases, department spokesman Ragan Ingram said. The department is also considering applications for changes in rates from the state’s third largest provider, Allstate, Ingram said.

Officials with the insurance companies said costs to policyholders will vary depending on where they live, their house and other factors. All said the rate increases are meant to make sure they have money to cover future losses.

“It’s about having enough premium and protection to pay future claims,” State Farm’s David Majors told the Press-Register newspaper in Mobile.

Many insurance companies saw the value of their investments decline over the last year, said Amy Bach, executive director of United Policyholders, a California-based group that advocates for consumers. “Whenever they’re getting bad returns on their investments, they look for ways to make things up by raising rates or becoming more creative in restricting claims,” she said.

“The rates reflect the risks we take as a company, and we have to charge rates that ensure we can take care of the needs of our customers if a significant event should occur,” Farmers spokesman David Bishop said of the latest increase.

Topics Trends Pricing Trends Homeowners Alabama