Farmers Insurance plans big increase in Texas homeowners rates

Farmers Insurance plans to impose double-digit rate hikes for hundreds of thousands of its customers in North Texas and across the state, blaming the increase on rising costs for labor and building materials.

The higher rates, which would be reflected on insurance bills beginning Feb. 16, affect policyholders for two of the company's largest subsidiaries. Farmers is the No. 3 home insurer in Texas.

Consumer groups acutely criticized the amount filing on Friday, adage it comes at the affliction time for abounding homeowners already activity the furnishings of the crumbling U.S. economy. They alleged on Accompaniment Allowance Abettor Mike Geeslin to adios the proposal.

A agent for the Texas Administration of Allowance said the filing will be carefully scrutinized over the next several weeks. Those allegation will be acclimated by the abettor in chief whether to block the college ante or let them go through.

Under the state's file-and-use law for insurance premiums, Farmers is allowed to raise rates once it has notified the insurance department, but the company is subject to a rate rollback – and refunds – if the insurance commissioner determines the increases are not justified. An insurer also has to pay interest on any refunds that are due.

In December, Farmers filed for a statewide 2.2 percent increase in home insurance for many customers. But that plan included hefty rate hikes of 20 percent to 30 percent along the Texas coast, while most policyholders in Dallas and Tarrant counties saw their premiums drop an average 5 percent.

Those new rates went into effect in February.

In addition to rising building costs, insurance-industry representatives also have cited the higher cost of reinsurance – purchased by companies to help pay claims after a catastrophic event such as a hurricane.