State Farm to Reduce W.Va. Homeowners Rates

State Farm announced Tuesday in Charleston, W.Va. it is lowering homeowners insurance rates in West Virginia by an average of 5 percent starting in December.

It marked the first time since 1989 that State Farm has won approval from the state insurance commissioner for a statewide reduction in homeowners rates.

The company credited changes in state law approved last year.
State Farm, which had incurred nearly $200 million in losses in West Virginia from 1993 through 2003, resumed issuing new homeowners policies in West Virginia last year after a three-year absence.

“This rate decrease is further evidence that we are achieving our goal of having an available and affordable insurance climate in West Virginia,” said Insurance Commissioner Jane Cline.

Last year State Farm reduced auto insurance rates by an average of 10 percent after lawmakers banned “third party bad faith” lawsuits that allege insurers for the driver at fault had not addressed the resulting claim reasonably.

Lawmakers also passed provisions allowing insurers to drop up to 1 percent of their homeowners insurance customers annually; to refuse to renew up to 1 percent of their auto policies statewide each year, though no more than 1 percent of their policyholders in any one county; and to change rates on businesses without prior state approval.

“These reforms brought more stability to the West Virginia insurance market, and have produced savings, which we can now pass along to our policyholders,” said Arlene Hogan, operations vice president for State Farm’s Mid-Atlantic Zone, based in Frederick, Md.

State Farm has the largest share of West Virginia’s homeowner market at about 25 percent. It also accounts for 28 percent of the state’s auto policies.