State Farm rate proposal challenged
The Foundation for Taxpayer & Consumer Rights is challenging State Farm’s proposed $4-million rate hike for mobile home coverage. In its Tuesday filing with the California Department of Insurance, the nonprofit consumer group asked Insurance Commissioner John Garamendi to hold a public hearing on the proposed 21.3% increase.
The group said State Farm raised rates on this line of insurance 47.7% in 2002 and 22.3% in 2001. If the current application is approved, it said, State Farm will have raised its rates by about 120% in the last four years for its 40,000 California policyholders with mobile home insurance.
The group said its analysis indicates that State Farm’s request is excessive because it inflates the insurer’s estimated future losses, seeks an excessive profit and includes an excessive provision for overhead expenses.
“We’re confident that our data shows the need for the increase,” said Bill Sirola, spokesman for State Farm.