State Farm proposes homeowners insurance rate hike

AUSTIN, Texas (AP) - State Farm insurance informed Texas insurance regulators Wednesday that it will raise its homeowners insurance rates by an average of 8.5%.

State Farm says it'll implement the new rate for new customers Sept. 1 and for existing customers upon renewal after Oct. 1.

The Texas insurance commissioner has 30 days to decide whether to approve the request.

The company says about one-third of State Farm's 1.2 million Texas ratepayers will see rate decreases or no change.

State Farm Lloyds Senior Vice President Mike Wey cites higher repair costs and a total 2008 Texas claims of $1.4 billion. It was a year that saw hurricanes Dolly and Ike and a streak of damaging spring hailstorms hit the state.

State Farm says it's paid $572.8 million in weather-related claims through May 2009.