Allstate raises premiums
By Frank Cho
Advertiser Staff Writer
Allstate Insurance Co. said this week it will raise Hawai'i homeowners' insurance premiums an average of 11.9 percent starting this month — the company's first increase in homeowner premiums in eight years.
The rate increase will take effect Dec. 9 for new homeowner policies and Jan. 23 for renewals of Allstate's roughly 26,000 policy holders. The average policy holder will see an increase of about $51 a year.
Like many other insurers, Allstate said rising home repair costs fueling the need for higher rates.
"It's costing us more and more money to keep our promise of protecting our customers," said Scott Richardson, a spokesman for Allstate. "We want to make sure we have the funds there when people need it. These rate changes will allow us to continue to protect or customers and ensure Allstate will be there to offer homeowners' coverage in the future."
Richardson said Allstate's rate increases will not affect consumers' hurricane insurance coverage, which are provided through Zephyr Insurance Co.
The state insurance division approved the rate increase, saying that insurers are facing increased costs because of rising claims and increasingly expensive building materials.
Allstate joins several other major home insurers that have increased home and hurricane insurance rates this year including State Farm, Liberty Mutual and USAA INSURANCE.
Allstate, the No. 2 home insurer in Hawai'i with $11 million in premiums last year, said the cost of repairing a home is up 7.2 percent this year and has been running at an annual growth rate of 6 percent for the past several years — several times faster than inflation. In addition, the company said that cases of insurance fraud are on the rise.
State Farm, Hawai'i's biggest home insurer, restricted its agents from writing new home insurance policies earlier this year because of rising claims. Since then, the company has loosen the restrictions somewhat and has begun offering renters and condominium coverage to new homeowners once again.
Two years ago, Allstate rolled homeowners' insurance rates back an average 18 percent for Hawai'i homeowners. The rollback was in response to a demand by state insurance regulators for all insurance carriers to cut their rates for homeowners, but Allstate at the time said it was probably going to lower rates already because of falling claim costs.
Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.
Correction: The average Allstate homeowners' policy holder will see an increase of about $51 a year, not $51 a month as reported in an earlier version of this story.
