HO BENCHMARK RATES TO RISE

Although the statewide average for homeowners insurance benchmark rates is slated to rise slightly in the coming year, Texas Department of Insurance Commissioner Jose Montemayor said the increase is not expected to have much impact on rates actually being charged. The 0.6 percent hike takes effect Nov. 1 but will directly affect only rate regulated companies, which cover about 5 percent homeowners market. Rate-regulated companies must file new rates within 30 days of the effective date. Companies that represent the remaining 95 percent of the market are encouraged to pay attention to the benchmark settings but are not compelled to do so. State law requires the insurance commissioner to set benchmark rates annually, but rate-regulated companies may file actual rates that vary 30 percent up or down from the benchmark. The 0.6 percent hike is only the second increase in the benchmark rate in six years; rates were cut during the other years. Companies such as Lloyd’s and reciprocal exchange firms are exempt from the benchmark system. According to BestWire, rates will decrease in some areas, such as in Dallas and Fort Worth. In San Antonio, benchmark rates will increase and in Houston they will remain unchanged. The insurance industry had requested a 3.5 percent rate hike for the coming year. TDI staff requested a 0.3 percent decrease and the Office of the Public Utility Counsel, a state agency that represents consumers, requested a 9.7 percent decrease in the benchmark rate. Montemayor ordered an 11.4 percent reduction in renters insurance statewide. Average benchmark rates for renters insurance have decreased in five of the last six years. The commissioner approved a 6.7 percent increase in the average statewide rates for dwelling fire coverage, and a 7.2 percent increase in dwelling extended coverage benchmark rates.