AUSTIN -- Allstate and State Farm, two of the largest auto insurers in Texas, are raising their rates, saying the boost is needed to offset a rising number of claims.

In filings with the Texas Department of Insurance, State Farm filed for increases of 2.4 percent and 7.3 percent, respectively, for its two auto insurance subsidiaries, State Farm Mutual and State Farm County Mutual.

The State Farm increases would kick in Oct. 27. Kevin Davis, a spokesman for State Farm, said Monday that the increases were the first in nearly five years for State Farm Mutual.

Allstate filed for increases of 3.6 percent for Allstate Indemnity and 5.5 percent for Allstate County Mutual. Allstate Indemnity insures 694,000 drivers in Texas, while Allstate County Mutual covers 435,000 drivers. Those rates rose in July.

Allstate needed to hike rates to account for a greater frequency of collisions and the rising costs of bodily injury claims, said spokesman Bill Mellander.

State insurance officials said the market has been stable for some time.

"We're seeing an uptick now, but we don't consider this to be more than upward pressure from low prices in the past," said Texas Department of Insurance spokesman Jerry Hagins.

Consumer groups criticized the hikes, saying the companies are earning adequate profits with their current premiums.

"It is unfortunate that State Farm and Allstate are choosing to raise rates on drivers at a time when Texans are struggling to keep up with rising costs of gasoline, food and housing," said Alex Winslow of Texas Watch, a consumer group active in insurance issues.

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4 comment(s) found!

Posted by: mka On: 8/20/2008

Comment Title: insuranve rate hike
guess i'll be changing insurance companies----but in the end they're all probably going to be the same---but honestly why punish your customers who have never filed a claim--- why not just punish those that have mulitple claims every year----i know---that makes to much sense and not enough extra revenue for the insurance company.

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Posted by: On: 8/20/2008

Comment Title: Insurance companies are organized crime
Name one other product or service that has a law stating you MUST purchase it. The three fastest ways to riches- Banking, Insurance and Real Estate. I guess that's why the banks are now selling it too and you often see businesses selling both insurance and real estate out of the same office. So sad to see the poor insurance business isn't profitable.And to add insult to injury, they have slogans such as, "Like a good neighbor" and "The good hands people". All I can say to that is, WATCH OUT FOR YOUR NEIGHBOR"S MIDDLE FINGER!!!

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Posted by: On: 8/20/2008

Comment Title:
Given the fact that the Republicans rule Austin, no surprise the State would help the insurance companies rip us off even more...

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Posted by: On: 8/20/2008

Comment Title: Insurance Increase
I don't know why this surprises me with everything else going up. I guess it's time to change my insurance company (Allstate).

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