Expect to pay more to insure your care with Allstate and State Farm

AUSTIN - Two of the state's largest auto insurers - Allstate and State Farm - are boosting their rates to offset the rising number of claims.

State Farm filed for increases of 2.4 percent and 7.3 percent, respectively, for its two auto insurance subsidiaries, State Farm Mutual and State Farm County Mutual.

Kevin Davis, a spokesman for State Farm, said Monday that the increases are the first in nearly five years for State Farm Mutual, which has 2.9 million customers. State Farm County Mutual, which has 200,000 customers, last had an increase in December that averaged 5.1 percent.

County mutuals in many cases sell coverage to higherrisk drivers.

Increased claim costs for both subsidiaries led to the higher rates, which go into effect Oct. 27, Davis said.

Allstate also filed notice of an increase in rates for its two subsidiaries with the Texas Department of Insurance. Customers of Allstate Indemnity will see an increase of 3.6 percent, while those insured with Allstate County Mutual will have a 5.5 percent increase.

"Our costs have been going up in two areas, collision frequency and bodily injury severity," said Bill Mellander, a spokesman for Allstate. "These increases will help us address those rising costs."

Mellander said the last increase in auto rates was in December and was about 1 percent for each subsidiary. "We've had very stable pricing for quite a while," he added. The new rates were effective in late July.

Allstate Indemnity insures 694,000 drivers in Texas, while Allstate County Mutual provides coverage for 435,000 drivers.

Consumer groups criticized the rate hikes, saying the companies are earning adequate profits with their current premiums.

"It is unfortunate that State Farm and Allstate are choosing to raise rates on drivers at a time when Texans are struggling to keep up with rising costs of gasoline, food and housing," said Alex Winslow of Texas Watch, a consumer group active in insurance issues.

"Drivers in Texas deserve rate relief, not additional burdensome rate increases from their insurance companies."