About 450,000 homeowners covered by Allstate Texas Lloyds will see a rate increase of 5.4 percent, effective Jan. 20. Rates for the estimated 175,000 homeowners covered by Allstate Texas Fire and Casualty will increase 9.7 percent, according to documents filed with the state regulatory agency.
The Texas Department of Insurance will review the Allstate rate filings to make sure they are justified. Regulators can order a reduction if a review indicates the rates are excessive.
Allstate rates are very competitive in Texas, company spokeswoman Kristen Beaman said Tuesday. The increase is necessary because of higher costs for construction and damage caused by destructive weather.
"It's a reflection of the weather in Texas," Beaman told The Dallas Morning News. "Hail and wind storms have been increasing in severity over the last several years. The increased cost of roofing materials is also a big factor."
The increase for Allstate Texas Lloyds customers averages $64 annually. The average increase for Allstate Fire and Casualty customers will be $115 a year.
"Here we go again," said Alex Winslow of the consumer group Texas Watch. "It seems like every time one of the major insurance carriers raises rates, they all raise rates."
Farmers Insurance in November announced plans to raise rates 3.9 percent in March, for nearly half of its Texas policyholders.
Allstate is increasing a discount for Allstate Texas Fire and Casualty customers who also have auto policies with the company to 22 percent from 15 percent.
"We don't take pricing lightly," Beaman told the Houston Chronicle. "We understand we have a responsibility to offer consumer products at a fair price, but it needs to be one that reflects risk as adequately as possible."
The Office of Public Insurance Counsel, which represents consumers, has sent a letter to the department opposing the planned Allstate increases.
Consumer groups would like the 2011 Legislature to return to a system of prior state approval of all rate hikes for auto and homeowners insurance.