2 auto insurers will raise rates

By Vic Kolenc, El Paso Times, Texas

Aug. 20--EL PASO -- The state's two largest auto insurance carriers are elevation their rates to cover rise costs.

State Farm, the state's largest auto insurance company with 3.2 1000000 Texas policyholders, plans to raise auto insurance rates an norm of 2.4 to 7.3 percentage statewide beginning Oct. 27.

In El Paso County, State Farm rates will addition an norm of 4.4 to 5.1 percentage, said Kevin Davis, a company spokesman in capital of Texas.

"We've seen an addition in claim costs; that's the ground for the addition," Davis said. Some policyholders could see rate decreases, he said.

Allstate, with more than 1.1 1000000 Texas policyholders, on July 21 increased rates an norm 3.6 to 5.5 percentage.

It does not have a offprint rate amount for El Paso County, said Bill Mellander, an Allstate spokesman in the Dallas area.

Increasing costs also is the ground for Allstate's increase, Mellander said. The company is visual perception more claims for hit and for bodily injuries, he said.

The addition on norm will mean "about $5 a month extra" for policyholders, Mellander said.

Last year, Allstate increased rates in Texas 1 to 1.8 percentage, but hadn't increased rates earlier that for several years, he said.

Davis said most of State Farm's policyholders had not seen a rate addition in about five years. Nevertheless, policyholders under State Farm County Mutual, which figure about 200,000 Texans, saw an norm rate addition of 5.1 percentage last year.

Jerry Hagins, a spokesman for the Texas

section of Insurance in capital of Texas, said the section was reviewing the rate addition to make sure they were justified.

But "on the face of it, these are very modest increases," and are more likely due to the "up movement of the convention business cycle followers several years of (rate) stableness," Hagins said.

"About 200 companies write auto insurance in Texas; it's a very competitive market," which helps keep rates down, Hagins said. "When you look at other states, we're somewhere in the middle in what people are paying for auto coverage."

Alex Winslow of Texas Watch, a consumer group active in state insurance issues, said it's "unfortunate" the companies are raising rates while "Texans are struggling to keep up with rising costs of gasoline, food, and housing."

Last month, the Consumer Federation of America called on states to determine whether auto insurance rates were correct as people drive less due to high gas prices. Hagins at the Texas Department of Insurance and Mellander at Allstate said it's too soon to tell whether driving habits have changed enough to affect rate structures.

But individuals who have changed their driving habits substantially, such as taking a bus to work, should contact their insurance company to see if they qualify for a lower rate category, they said.

The Associated Press contributed to this report.

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