NACOGDOCHES, TX (KTRE) - Higher homeowners insurance rates may be in store. State farm, the state's largest insurer, is requesting rate hikes and changes to deductibles, but according to state insurance regulators disasters are not a direct link to higher rates.
"Some people might fear that their rates will go up because of recent disasters, but the truth is those kinds of events are averaged in over the long haul," says Jerry Hagins, with the Texas Department of Insurance.
On the heels of numerous natural disasters, State Farm plans to increase homeowner rates an average of 9.6 percent in October and enact a one percent deductible starting in December.
Volume and cost of claims are factors, but not from the most recent fires.
"For instance, in the spring we had a rash of wildfires and , of course, the Texas hail storms and for those events State Farm paid claims totaling more than $350-million," says Kevin Davis, a State Farm Spokesperson.
Right now a house insured for $200,000 with a $1,000 deductible and a $10,000 claim would collect $9,000. After the 1 percent deductible, only $8,000 would be collected.
The premium changes depend on lots of variables including home construction type, age, and claim experience.
"About 43% of our customers' policy holders will actually not see any changes or any natural decreases in their homeowners bill, their actually premium," says Davis.
The changes are not necessarily industry wide. Each company's financial strength varies.
State farms' proposed changes are currently under review by Texas Insurance Regulators.
Insurance professionals advise consumers to have annual reviews with their agent, no matter what company carries the homeowners insurance.