Homeowners' insurance rates on the rise

Homeowners' insurance rates are on the rise for many people in the state. The latest company to increase premiums is State Farm.

It plans to raise rates by an average of 5% across Alabama, except in Mobile and Baldwin Counties.  Renters insurance rates will increase by an average of 7%, with condo owners rates going up by an average of 7.2%.

State Farm said the rate increase is an anticipation of costs related to the frequency and or severity of future claims.  It wants to remain in a strong position to take care of its customers in the state, according to Spokesperson Roszell Gadson.

State insurance officials said it's too early to do know the full impact of the April tornadoes on insurance companies.   More than 65,000 claims were filed with insurance companies after those tornadoes.

ALFA temporarily suspended new homeowners policies on homes more than 10 years old after the storms, but has since restored those services.  This month, it increased its homeowners rates by an average of 20%.    National insurance companies, like State Farm, have had to deal with other disasters like Hurricane Irene and the Texas wildfires.

Despite that, state insurance officials don't expect major increases in rates over the next two years.

"There are other factors that come into beyond that," said Ragan Ingram, Governmental Relations Manager for the  Alabama Insurance Department.  "How the companies performing financially, Reinsurance costs is another major player.  Will insurance rates stay the same because of April 27th probably not, but we're not expecting massive spikes upstate."

The new rates take effect beginning next month for new customers.  And for renewals take effect beginning on January 1st.  To see all of the rate changes filed by companies in the state, click here, and search for Homeowners policies.

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