State Farm, Allstate Agree on Mississippi Homeowners Rates

After months of separate discussion, State Farm and Allstate insurance companies reached an agreement with Mississippi Insurance Commissioner Mike Chaney on homeowners insurance rate filings.

Allstate will see a statewide average increase of 13.9 percent on policies with wind and hail coverage effective Sept. 22 on new business and Nov. 6 for renewals.

Allstate’s statewide average increase will be 14.1 percent on policies with wind and hail coverage effective Sept. 22 on new business and Nov. 6 for renewals.

The Mississippi Insurance Department granted State Farm, which made its initial filing in 2006, a statewide average increase of 13.6 percent, effective Nov. 1 for new business and Dec. 1 for renewals.

Coastal policyholders with Allstate who do not have wind coverage will see no increase. Allstate policyholders with wind and hail coverage will see changes. Seventy-nine percent of Allstate policyholders on the coast will see up to 40 percent increase in premiums. Away from the coast, more than 90 percent will see up to a 5 percent rate increase.

MID said Allstate is also working on wind mitigation discounts.

Allstate’s original filing sought a 309 percent increase for some policyholders and a statewide average increase of 29 percent. Chaney refused that request.

State Farm’s original filing included withdrawing coverage on 32,000 homes. Now, coastal State Farm policyholders who do not have wind coverage will see no increase while most who still have wind coverage could see anywhere from 10 percent decreases to 20 percent increases depending on their location, deductibles and type of dwelling they own.

State Farm policyholders away from the coast could experience 3 percent rate decrease to a 6 percent rate increase. State Farm will also be changing some policyholders a mandatory hurricane deductible for wind damage.

Without these agreements as much as $5 billion of wind coverage would have been put into the state-run wind pool which would have cost the state in excess of an estimated $200 million in state revenue yearly to keep rates at present levels, according to Chaney.