USAA Files of Increase in Homeowners Insurance Rates
USAA files for an increase in homeowners insurance rates stating increased frequency in catastrophic events and, therefore, increased claims and construction costs necessitate a rate increase.
On October 10th, USAA proposed to increase homeowners insurance rates across Texas by an average of 7.6 percent. Stuart Parker, president of USAA Property and Casualty Insurance Group, told the Houston Chronicle that after lowering rates 5 times in the last 6 years, "increasing claims and construction costs, along with projected catastrophe losses require [them] to raise rates now so [they] can meet the future needs of [their] Texas membership." Harris County, a high-risk costal area, is expected to be hit hard by this with an average rate increase of 20.9 percent for more than 30,000 residents.
By Texas law, rates must be just, fair, reasonable, and adequate, cannot be excessive for the risks to which the rate applies and cannot be discriminatory. Rates are considered excessive if the rate is likely to produce a long-term profit that is unreasonably high in relation to the insurance coverage provided and discriminatory if they are not based on sound actuarial principles or do not bear a reasonable relationship to the expected loss.
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