Texas Insurance Commissioner José Montemayor released the following statement on the state’s settlement agreement with Farmers Insurance Company on homeowners rate reductions:
“I have reached an agreement with Farmers Insurance that will provide substantial relief to the company’s homeowners policyholders. The agreement contains three major benefits for these policyholders, worth more than $100 million.
“First, Farmers has agreed to reduce its current rates by 5% for all current and new policyholders and freezes any increases for at least the next year and a half. Second, all existing Farmers policyholders who renew their policies will receive an additional 15% off of the already lowered rate, for a total reduction of 20%. Finally all policy holders will be offered increased water-damage coverage, up to 50% of their policy limits, at no additional cost.
“Taken in concert, these provisions will offer Farmers policyholders an estimated $100 million dollars in relief, which exceeds the amounts originally ordered in 2003.
“Farmer’s policyholders will finally see the rate relief they deserve. I was disappointed when a state district court ruled that the law used to order rate reductions in 2003 was unconstitutional. This agreement avoids the very real potential of an extended legal battle and provides rate reduction for a substantial portion of the Texas homeowners market.
“Due to the legislative reforms enacted during the last session, the Texas homeowners market has been steadily improving and becoming more competitive. This action will further spur that competition.”
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