Citing growth and hurricane threats on Alabama’s coast, State Farm will boost its homeowners insurance rates by 12 percent to 18 percent in Mobile and Baldwin counties.
The Alabama Department of Insurance approved the new rates July 22 for the state’s largest property insurer. Some 700 policies on the coast also will lose State Farm’s wind coverage over two years.
State Farm will also require a hurricane deductible equal to 5 percent of the value of a policy for renewing Mobile and Baldwin customers. Those customers will pay a 1 percent deductible for other losses, including fires and thefts.
Elsewhere in Alabama, State Farm spokesman David Majors said rates will drop by an average of 0.9 percent.
Majors said the rules could be applied to new customers as early as Sept. 15, and Dec. 1 with renewals. Customers losing wind coverage must be notified 120 days before their due date, under state rules.
Alabama last approved a State Farm rate change in 2006.
Rates have risen sharply and insurers have cut customers in Mobile and Baldwin since 2004′s Hurricane Ivan. Between 2001 and 2005, homeowner insurance rates in Alabama rose by the second largest percentage among the 50 states and District of Columbia.
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