View this article online: https://www.insurancejournal.com/news/southeast/2010/05/26/110184.htm
State Farm will file a rate increase with Mississippi Insurance Commissioner Mike Chaney in the next few months.
Company spokesman David Majors said that details are still being worked out.
Last year, State Farm boosted rates by an average of 19.5 percent in Mississippi’s three coastal counties: Harrison, Hancock and Jackson. The company was seeking a 45 percent increase.
And while State Farm, the state’s largest insurer, has paid out much of its Hurricane Katrina-related claims and resolved most of the legal disputes over whether wind or water caused damage to a particular property, the company still faces a lot of risk in insuring homes and other property along the coast, according to Steve Simkins, State Farm’s chief counsel in Mississippi.
Simkins said State Farm has paid more than $2 billion in Katrina-related claims since 2005.
“We’re not coming in and asking for what we’ve lost. We found out we have more exposure to a major storm,” he said.
Chaney said he won’t approve it or any other proposed rate hikes until at least a year after a company’s last increase took effect and won’t approve any hikes during hurricane season, which runs June 1 through Nov. 30.
Chaney said he will look over whatever State Farm requests to see if it is reasonable.
It’s been nearly five years since Katrina battered the Gulf Coast, and State Farm has yet to resume writing new homeowner policies in the three coastal counties, although it is renewing policies in those areas.
Another company seeking a rate increase is Allstate, which is seeking a 44 percent rate hike statewide.
Chaney in 2009 rejected a proposed 65 percent increase in Allstate’s home insurance rates throughout Mississippi, saying it was simply too much. The company was left to file a new request for a lower increase.
Allstate has said a rate increase is needed because of a growing number of claims by Mississippi customers from fires, break-ins, water damage and liability.