Your Good Neighbor Wants More Money

The state’s largest home insurer, State Farm, is raising your rates…for the second time this year.
And the state can’t do much about it.
 

We do have a Texas State Insurance Commission, and a commissioner heading it up. And his job is to protect consumers from excessive rates and questionable practices. But the fact is, he doesn’t…
 

And the reason he doesn’t is because his office is essentially toothless.
 

“We have a system that allows insurers to do whatever they want with regard to rates and coverage without really very much oversight,” says Alex Winslow of Texas Watch, a consumer organization in Austin.
 

State Farm controls about a third of the home insurance market in Texas, and for the second time in 9 months, they’ve decided to raise rates.
 

They can raise their rates at any time without having to really justify it to anybody….not to their customers, not to the state legislature, not to the insurance commissioner,” Winslow told us.
 

In the Tyler/Longview area it will mean a roughly 18% increase in your bill.
 

Surely, you say, they have to get that approved.
 

Well, you’d be wrong.
 

“We really have a toothless situation right now where nobody is really looking out for the consumer,” says State Senator Kevin Eltife.
 

Current law allows them to announce the rate, and start charging you. If the commissioner doesn’t like it, he has to say so after the fact, and then how do you enforce it?
 

“The legislature really needs to step up to the plate and say enough is enough. We need a system where the insurance companies need to get their rates approved before they post them on their consumers,” Winslow concluded.
 

Eltife agreed, “I think the consumer group you’ve spoken to makes absolute sense. They ought to have to get approval for their rates before they start charging the consumer. Because another thing they’re doing. They put the rate in place, start getting the money. And then they ie this stuff up in court for years while they’re collecting money from the consumer. It’s not right. People are struggling. Now more than ever we need to try to protect the consumer.”