Posted: Dec 7, 2011 7:10 PM
The state has allowed its largest insurer of homes to raise its rates by an average 7.8 percent.
State Farm Fire and Casualty Co. said Wednesday that the $32.2 million increase goes into effect with new policies on Feb. 15 and renewal policies on April 1.
The rates will rise depending upon where homeowners live, said company spokeswoman Molly Quirk. Although most coastal areas are in for increases, the largest jump will total 19.5 percent in northeastern Louisiana parishes around Monroe. Rapides Parish, including Alexandria, is in for a 13.9 percent hike.
State Farm has about 301,000 policyholders in Louisiana. The company was permitted a 9.9 percent average increase last year and an 8.3 percent increase in 2009 after requesting 13.7 percent.
Insurance companies are not granted rate increases based upon prior losses, such as damage from four major hurricanes that have hit Louisiana in recent years. Instead, the rates are supposed to be set on projections of future losses using complicated mathematical models.
Among various regions of the state:
- State Farm policyholders in Orleans and Jefferson Parish will see average increases of 7.5 percent.
- Policyholders in the Shreveport-Bossier City area are in for average increases of 5.5 percent.
- State Farm customers in East Baton Rouge and West Baton Rouge parishes will get average increases of 7.4 percent.
- Calcasieu, Lafayette and St. Tammany parishes are slated for 6.9 percent increases.
- One area consisting of Avoyelles, East Feliciana, St. Helena and West Feliciana parishes will see rate decreases averaging 3.7 percent.
- Other Louisiana coastal areas are in for rate increases ranging from 7.5 percent to 15.6 percent.
In March, Insurance Commissioner Jim Donelon rejected a State Farm request for an average 14.3 percent increase, saying it was not justified. That increase would have raised homeowner rates by $55 million annually.
A request was made with Donelon's office for comment on the latest rate decision.
Quirk said the increases also affect coverage for renters and condominiums.