Sunday, May 25, 2008

Farmers Insurance Asks For Biggest Rate Increase in Kansas

Auto, home insurance premiums on the rise

BY DEB GRUVER

Auto and homeowners insurance premiums are rising in Kansas, with several of the biggest companies asking for -- and getting -- rate increases since the first of the year.

The Eagle on Friday obtained rate revisions granted by the Kansas Insurance Department since Jan. 1. The filings show that among insurance companies that filed for rate changes, most increased premiums.

The average rate increase granted to auto insurance companies was 6.1 percent. The average increase granted for homeowner insurers was 7.5 percent.

On the homeowner side, Farmers Insurance Co. asked for the biggest increase, an average 14.1 percent, which took effect May 16.

The reason for the rate increase is simple, said Farmers spokesman Jerry Davies.

"Overall, we've seen a rise in claims and a rise in claim costs," he said. "With the economy today, the cost to rebuild" and make repairs is higher.

Farmers is the third-largest homeowners insurance company in the state.

Farmers received a 3 percent average rate increase for auto insurance Jan. 1, and a 4.7 percent average increase will take effect July 1. On the auto side, the biggest increase was for Allstate Fire and Casualty, whose 14 percent average increase will take effect June 2. Allstate Property and Casualty was granted an 11.2 percent average increase effective the same day.

Allstate is the ninth largest company for auto insurance in Kansas.

Allstate Indemnity Co. and Allstate Property and Casualty Insurance each raised homeowner premiums an average 12.7 percent on May 19.

"Homeowners and auto insurance rates in Kansas appear to be trending up, but companies believe their increases are necessary to maintain their financial stability so they can continue to offer products in our state," said Bob Hanson, a spokesman for the Kansas Insurance Department.

To be considered for a rate increase, companies must submit five years' worth of premium and loss data that justify raising premiums. Companies can ask for a rate adjustment at any time, but increases are not automatic.

"We want to make sure we have the ability to take care of our customers," said Christina Loznicka of Allstate.

Reach Deb Gruver at 316-268-6400 or dgruver@wichitaeagle.com.

Source: kansas.com

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