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Wednesday, August 22, 2007
Insurance Rate Hike Blocked in Texas:
The Texas Department of Insurance has blocked Allstate's plan to raise homeowner insurance rates by 5.9 percent, faulting the proposal as unreasonable and excessive.
Thus begins the Tyler Paper's explanation of the rate increase block.
I'm normally a believer in the free market and I find disfavor in government intervention in markets. Normally. That isn't the case here, primarily because the insurance "market" here isn't really a market. It's more like a cartel. Furthermore, I agree that the rates aren't justified.
I say this because of my own situation. I live outside of Tornado Alley, and 200 miles from the coastal plain. We get moderate storms, and seldom do we see a tornado. Hurricanes become torrential downpours before they reach my home. And, we live on a relative plateau, not prone to flooding.
So why are my rates in excess of $1400/yr when I've done everything Allstate has asked me to do to mitigate high rates? One reason, and only one reason. Because I live in Texas. And just because I live in a state where the cost of doing business is high doesn't justify the rate. If I lived in Galveston, or Corpus Christi, or even Dallas, perhaps I could see the rationale. Living in East Texas, I just don't.
.: posted by
Dave
1:01 PM
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