Farmers Insurance to spike rates in the Lone Star State

Only months after Hurricane Ike, Farmers Insurance is planning to impose a double-digit rate hike for hundreds of thousands of Texas homeowners. The rates are set to take place on February 16th 2009 and will affect homeowners from two of the company’s largest subsidiaries.

Homeowners across the state are highly against the timing of the  rate increase as they feel they are already hurting from the current economic crisis. Consumer groups are calling on State insurance Commissioner Mike Geeslin to reject the proposal.

A spokesman for the commission said they will weigh all sides in the matter before making a decision whether to block the higher rates or let them go through.

Representatives from Farmers Insurance claim that the rate increase is caused by the rising cost of labor and materials. The company claims that the rate increase was well in the works before the two major hurricane losses (Ike and Dolly)  devastated homeowners across the state.

Texas homeowners already pay some of the highest homeowners insurance rates in the country. In 2005, Texas homeowners paid on average $1,372 per year for home insurance. Texas home insurance premiums  in 2005 were 79% higher than the U.S. average of $764.

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