State Farm Lloyds, the Texas property insurance affiliate of State Farm Insurance Companies, has filed an application for a temporary restraining order, temporary and permanent injunction and declaratory relief against the Texas Department of Insurance (TDI). The action comes in response to the Department’s recent attempt to circumvent a District Court ruling.
“State Farm acknowledges that the Commissioner has the authority to regulate rates,” said Ron Dodd, president and CEO of State Farm Lloyds. “But we disagree with the position the TDI has taken to resolve the controversy over the rates charged by State Farm Lloyds.”
State Farm Lloyds said it provides a competitively priced homeowners insurance product with broader coverage than a majority of insurers in Texas. Independent sources*, including TDI’s own complaint ratio information, also reportedly show that customer satisfaction with State Farm is high.
When comparing base premium rates and overall value, policy differences must be considered. Several homeowners policy forms are offered by insurers in Texas. State Farm’s homeowners policy, the HO-W, reportedly provides much broader coverage than the homeowners policy forms being offered by other major insurers.
Despite getting more comprehensive coverage, State Farm customers are not necessarily paying more according to homeowners rate information obtained from the TDI Web site. For example, the average base premium for a $100,000 brick veneer home in Dallas County with a $1,000 deductible and $40,000 contents coverage is $1,040 per year. By comparison, State Farm’s base premium for a $100,000 brick veneer home in Dallas County with a $1,000 deductible and $75,000 contents coverage is $905 per year. The findings were similar in the other counties in which rates were compared.
“Customer retention for State Farm Lloyds is at historically high levels,” said Dodd. “We believe the demand for State Farm’s homeowners product remains high because consumers know State Farm offers the best combination of product, price and service.”
Dodd added, “State Farm’s success has been possible because of our ability to attract and keep customers. We do that by offering an excellent product and exceptional service at a competitive price. We also have an obligation to make sure that we are financially prepared to keep the promise of our policy when our customers suffer covered losses. When our customers and others look at the facts, consider the price, protection and personal service they get with State Farm, they know that their State Farm policy offers them an excellent value.”
*JD Powers and Associates 2004 Homeowners Insurance Study
Was this article valuable?
Here are more articles you may enjoy.