Homeowner’s Insurance Rates to Rise 10% In Arkansas
Homeowner insurance premiums in Arkansas are expected to rise this year by an average of 10 percent as the industry works to rebound from 2008’s dual blows of foul weather and nasty financial markets.
The Arkansas Insurance Department said the more than 100 companies that wrote homeowner policies in Arkansas last year paid out $774 million in claims, $206 million more than they took in. The payout in 2007 was $253 million.
Premiums jumped an estimated 6 percent last year as insurers paid out claims for a variety of catastrophic events.
“You can’t get too far ahead of Mother Nature,” said Bill Lacy, who heads the department’s division that monitors homeowner rates. “The weather’s been catching up to us.”
Allstate saw its Arkansas subsidiaries this summer kick in premium increases that averaged as high as 28 percent. Nationally, the company has bumped rates in half of the states by an average of 9 percent.
The higher prices come after the firm posted $1.7 billion in losses last year, a shortfall driven by a $2.3 billion increase in property claims and $5 billion in capital gains losses.
The state’s largest home insurer, State Farm Insurance, bumped up its Arkansas premiums this spring by 9 percent.
“Our policyholders don’t want an IOU if their roof is blown off their house or if it burns down,” said company spokesman Gary Stephenson.
The state is on pace to see more increases than the 51 for approved last year. Only 28 went forward in 2007. More than half of this year’s 44 rate increases have been double-digit. Only four company premiums rose that much two years ago.
The storms in Arkansas have been pricey but are not squeezing some insurers such as State Farm just yet.
That company has paid out $23 million for claims related to January’s ice storm in northwest Arkansas. And it has paid out $12 million to cover damage from a June 30 storm that hit Sherwood residents particularly hard. Home remodel permits there for the month of August shot up nearly 550 percent compared with a year earlier.
Information from: Arkansas Democrat-Gazette, www.arkansasonline.com
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