June 01, 1999
|For more information call:
Public Insurance Counsel Recommends Rate Decrease for Homeowners Insurance
AUSTIN—Public Insurance Counsel, Rod Bordelon has today filed recommendations to reduce homeowners insurance premiums by -12.7%. The reduction would be -8.7% for renters (tenants). Overall, the statewide benchmark would be reduced -11.5% for all property coverages combined. The recommendation will be considered at the annual benchmark rate hearing to be held June 22, 1999 for rates effective after November 1, 1999.
"There is no question that homeowners insurance rates are currently excessive and must be reduced," said Bordelon, who as director of the stateís Office of Public Insurance Counsel represents policyholders in rate hearings. Bordelon cites recent favorable loss experience as the reason for the rate reductions. "Although, many Texans have experienced violent weather extremes in recent years, the overall insurance losses have been declining", said Bordelon. "In addition, rates were increased significantly a few years ago to account for high losses in 1995 and prior."
The first step in reducing rates is the benchmark hearing. While each company may file and use rates as much as 30% above or below the benchmark, those rates must still be reasonable and not excessive. "Given what we believe to be necessary rate reductions, we will contest those filings which are excessive even if they contain a modest decrease," said Bordelon. "The reductions in losses are simply too large for anything less than immediate and significant rate relief."
For more information on rates, contact the Texas Department of Insurance at 1-800-599-SHOP(7467) or the Office of Public Insurance Counsel at 512-322-4143.