California Insurance Commissioner Steve Poizner has approved homeowners insurance rate increases for State Farm and Farmers, increasing premiums by a combined $115 million.
State Farm customers will soon face an average 6.9 percent hike and Farmers policyholders’ rates will climb 4.1 percent. In both cases, the nonprofit Consumer Watchdog had formally challenged the rates and petitioned Poizner to hold hearings pursuant to Proposition 103, but the commissioner rejected those requests.
The consumer group is concerned that with the sinking economy, more insurers will turn to rate hikes. “Insurance company profits are tied to their investment income and when the economy weakens companies try to push premiums higher in order to maintain high profits,” said Consumer Watchdog said in a statement.
“While everyone is feeling the sting of a bad economy, insurance companies want to pass the pain on to homeowners and other policyholders. The insurance commissioner stands between these companies and our wallets and Californians need him to be there,” said Douglas Heller, Consumer Watchdog’s executive director.
Source: DOI, Consumer Watchdog
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