Aug 18, 2010 11:22 PM by Chris Welty
NEW ORLEANS (AP) - Louisiana homeowners who get their insurance
coverage from five companies owned by Allstate Corp. will start
paying higher rates in either November or December.
Insurance Commissioner Jim Donelon recently approved rate
increases ranging from 2.9 percent to 11.6 percent, depending upon
which of the Allstate umbrella companies writes the coverage.
But Allstate spokeswoman Allison Hatcher said that up to 44
percent of the company's customers who buy both auto and home
coverage from Allstate stand to see an overall deduction. The new
rate structure makes dual customers eligible for a reduced premium
of up to 30 percent - an increase from the current 10 percent,
according to Donelon's order.
Northbrook, Ill.-based Allstate, according to state insurance
department figures, insures just over 164,000 homeowners through
its five companies. State Farm Fire and Casualty Co. is the state's
largest homeowner insurer with 301,000 policies. That company
received an average 9.9 percent increase in May.
The 78,375 homeowners covered by Allstate Insurance Co. will
pay, on average, 11.6 percent for homeowners-only coverage. The
78,793 homeowners covered by Allstate Indemnity Co. will pay 3.3
The higher rates are effective Dec. 2.
Hatcher said the increases will mean about $150 more in annual
premiums for each homeowner-only policyholder of Allstate Insurance
and $40 per year for Allstate Indemnity Co.
Among the smaller Allstate carriers, Encompass Indemnity Co.,
with 1,929 policies, received an average 2.9 percent increase.
Encompass Property and Casualty Co., which covers 871 homeowners,
received an average 3.9 percent hike. Encompass Insurance Co. of
America, with 3,418 policies, received an average 3.7 percent rate
Those rates go into effect Nov. 11.
Rate increases are granted based upon actuarial models that
project potential future losses and the reserves that will be
needed to cover them. They are not based on past losses and how
much was paid out for claims.