Monday, November 10, 2008
Farmers Requests 10 Percent Hike in Homeowners Insurance, Effective Feb. '09
Letter writer asks, 'What's up with that! We already have the highest premiums in the country'
Email your comments and news tips to online.editor@valleyspringcomm.net
or pstern@austin.rr.com
Dear TDI Commissioner Mike Geeslin and Texas Legislators:
This request for a hike in homeowner insurance is an outrage (see story below). Four years ago Farmers Insurance, along with other companies in Texas, doubled insurance premiums and now it wants even more. In some cases the coverage of homes dropped while the increases were applied.
Currently Texas has the highest cost of homeowner insurance premiums in the nation.
The insurance commission should say "No!" to Farmers and the legislature needs to cut down on the lax legislation provided to the industry.
There is no justification for another increase at this time no matter how Farmers tries to defend it to the commission. Currently I pay more than $1,700 per year for my basic homeowner policy. Some homeowners pay more. Isn't that enough?
In addition, if Farmers gets an increase – no matter how much – the other insurance companies in Texas will follow suit.
It is time the Texas Department of Insurance and elected officials protect homeowners in Texas from yet another financial assault by a greedy insurance industry. We have paid enough!
Sincerely, Peter Stern, Driftwood, Tx
Farmers Insurance plans to up rates
AUSTIN — Farmers Insurance has filed for an average rate increase of 9.9 percent for homeowners insurance policies effective in February, state and company officials said Friday.
The Texas Department of Insurance says it is reviewing the rate increase, which is to take effect Feb. 16 on typical homeowner policies across the state.
"There will be ample time for us to make sure that it's a good rate," said insurance department spokesman Jerry Hagins.
Farmers spokeswoman Michelle Levy said the rate was filed earlier this week and that the increase is intended to cover the increased costs of labor and materials. It has been under consideration for several months and is not occurring because of Hurricanes Ike and Dolly, both of which struck Texas this year, she said.
Texas has a "file and use" policy that allows a company to file a rate and use it, though the state insurance department can review whether the rate is fair.
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As a former sales trainer for the insurance industry (yes, I have sinned), I know from years of experience that relying on the Texas Department of Insurance to protect consumers from insurance company exploitation is like letting the fox guard the chicken coop.
As with most regulatory agencies here in Texas, the primary job of the Texas Department of Insurance is not to protect consumers, but to "clear the way" for insurance company profits and their ability to do business here in Texas.
In reality, the specific tasks of the Texas Department of Insurance are to approve newly filed insurance products, "review" premium rate hikes, collect annual fees from insurance companies and new and renewing agents, and to create the appearance of taking and addressing complaints against insurance companies and their agents. For the most part, the Texas Department of Insurance performs the tasks necessary to insure its own government agency funding and survival.
Like most of America, the job of the State insurance commissions is rarely about insurance industry accountability. Also rare is disciplinary action taken against companies and their agents except in the case of obvious chicanery and lawlessness.
The only way consumers will ever be protected from insurance company abuse and their "contractual" shenanigans is to get a 51% "consumer" representation on the commission's Board. Of course, since the Texas Insurance Board is selected by the State Legislature (most of whom are controlled by their corporate masters), that won’t happen.
Consumers also have the power to shop rates and drop the company “abusers,” hire a lawyer, or organize state-wide boycotts to use the power of economics to create change.
Also, anyone fed up with the insurance industry (or corporate abuse in general) can contact Texas Watch (www.texaswatch.org), a non-profit consumer advocacy watchdog agency that goes after insurance company abuse, among others.
Otherwise, be a good American. Keep your mouth shut, pay the constantly rising premiums, and play the victim while you continue getting ripped off by the insurance industry
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