State Reps. Kent, Miklos and Turner respond to recent rate hikes by Texas’ largest insurance provider
AUSTIN – Today State Representatives Carol Kent, Robert Miklos and Chris Turner renewed their call for comprehensive insurance reform in light of last week’s announcement that State Farm, Texas’ largest homeowners insurance provider, will raise rates by 4.5% in May, just seven months after an 8.8% rate hike. This comes on the tail of recent rate increases by both Allstate and Farmers Insurance.
“Most families in North Texas haven’t seen their incomes go up by double digits this year, yet these big insurance companies think it’s ok to increase their premiums by double-digit percentages,” said Representative Chris Turner (HD 96-Burleson). “With Texans already paying the second highest homeowners insurance rates in the nation, this is unacceptable.”
In November, Allstate announced a 9.8% jump in their homeowner’s insurance rates. In January, Farmers Insurance, the third largest insurance company in the state, proposed raising rates 10% statewide and 11% for North Texas area customers. According to the Dallas Morning News, after Texas Insurance Commissioner Mike Geeslin called the hikes, “excessive and discriminatory,” Farmers agreed to only increase their rates by 4.5%. However, the company will be allowed to charge the excessive rate through March 2011 and keep the premiums they have already overcharged.
Currently, insurance companies are required to notify the Texas Department of Insurance (TDI) of rate increases, but TDI has no authority to block these rate hikes.
“The insurance commissioner should have the power to stop outrageous rate increases,” said State Representative Robert Miklos (HD 101 – Mesquite). “By increasing their rates by double digits in less than a year, State Farm is sending a message that it is ok to for insurance companies to line their pockets at the expense of consumers.”
In an attempt to combat overnight rate hikes by insurance companies, legislation has been filed in the past to create a “prior approval” system, which would give TDI the power to approve or deny these rate increases and give the agency true oversight over this industry. Many of the filed measures would have allowed for increased public input when insurance companies ask to raise their rates.
“During the next Legislative Session, when TDI is up for sunset review, we need some common sense oversight to protect homeowners.” said State Representative Carol Kent (HD 102 – Dallas). “There are far too many North Texas families struggling to make ends meet in this economy, and raising their insurance rates over and over again will just make that struggle even harder.”
In late May, the Legislative Sunset Advisory Commission, comprised of six member of the Texas Senate and six member of the Texas House, will begin to review TDI. Once the review process is complete, the advisory committee will present its recommendations to the 82nd Legislature.
State Representatives Carol Kent and Robert Miklos represent Dallas County districts. Representative Chris Turner represents southern Tarrant County.