Mississippi Grants State Farm Homeowners Increase

Mississippi Insurance Commissioner George Dale announced that State Farm Fire and Casualty Co. was granted modified rate hikes for homeowners insurance consisting of a 19.9 percent increase statewide, and a 25 percent increase in the three Gulf Coast counties. Dale said the increases will allow the company to continue to serve the state’s homeowners insurance market.

On November 12, State Farm announced that it would cease writing new homeowners insurance customers in Mississippi as a result of five years of losses in the state that totaled $111 million in underwriting losses. The company cited higher construction costs, increased water losses, and increases in medical costs and legal expenses as factors contributing to the substantial losses.

State Farm originally had requested increases averaging 42.5 percent statewide and 79 percent in the three Gulf Coast counties to allow them to continue to write homeowners insurance in Mississippi.

“Granting a modified increase to State Farm will allow the company with the largest market share in the state to continue to write homeowners business,” Dale said. “One important aspect of my job is to maintain a marketplace for the sale of insurance.”

The modified rate increase for State Farm’s consumers will not go into effect until policies are up for renewal.

Even with the modified rate increases, there are actions that consumers can take to manage the cost of homeowners insurance, Dale said. Preventative actions, such as checking to make sure washing machine hoses and icemaker lines are in good shape and repairing small roof leaks promptly can curb water damage claims. Installing smoke detectors and following manufacturers’ instructions when using space heaters can prevent fire damage claims. Selecting a higher policy deductibles and eliminating hazardous conditions can help keep premiums manageable.

The following actions by policyholders can result in a discount:
• Increase the policy deductible, including adding a higher hurricane deductible.
• Install an automatic sprinkler system.
• Install approved hurricane shutters (applies to coastal zones only).
• Install a burglar alarm, dead bolt locks, and fire extinguishers.
• Update electrical, plumbing, and heating systems.

In addition, many companies offer a home/auto discount for policyholders that have their homeowners and auto insurance with the same company. For policyholders with no claims, higher discounts may be offered the longer they are with the same company.

Because of strained conditions in the homeowners insurance marketplace, Dale encouraged consumers facing increasing premiums to shop around and compare aggressively, but to not cancel existing coverage until a new policy is obtained.

Topics Mississippi Homeowners