Insurance Premiums On The Rise in Texas

March 31, 2002

Insurance Premiums On The Rise

Have you talked to your insurance agent lately? If you're like many Texans

you may be paying more, a lot more, for coverage. Over the past several

months insurance premiums have sky rocketed. The governor's office has

targeted the big three companies- Allstate, State Farm and Farmers. Governor

Rick says those three carriers write 66 percent of the polices in

Texas and rates have increased up to 200 percent in some parts of the State.

" Allstate sent me my normal monthly bill and it was increased on the

automobile 32% and on the house 35% " Violette says he hasn't made a claim

in 30 years, so he called his agent hoping to get some answers.

" He said insurance claims have been outrageous especially due to black mold

claims in Houston. Well, I don't live in Houston and he says that's just

the way it is "

But, Allstate spokesperson Schmitt says rising rates in Lubbock are

not related to problems in other parts of the state. " It's our obligation

to policy holders to be financially strong enough to protect them when

disasters happen and in Texas we know that disasters happen "

And while mold may not be an issue in Lubbock, severe weather certainly is.

" Nobody in West Texas would disagree with the number of tornadoes, straight

line winds and hail that we're vulnerable to and those types of storms are

more frequent in Texas and that increases losses and expenses for insurance

companies "

The Texas Department of insurance says insurance companies should expect to

have good years and bad years and that having a bad year isn't reason enough

to pass the financial burden onto consumers.

Violette agrees, " cost of living goes up and I understand that, but the

people you work for are downsizing they say you have to take a pay cut, so

it's very unbalanced "

In response to the large number of complaints they have received, Allstate

says they are devising an additional policy that will have a lower premium

while providing more than minimal coverage.

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