State Farm plans to raise Texas homeowner rates 4.5 percent!

State Farm Lloyds, which holds 30 percent of Texas homeowners insurance market, plans to raise its rates 4.5 percent later this Spring, the company said in a filing with a state regulator.

Mike Geeslin, Texas Department of Insurance commissioner, asked State Farm to withdraw the rate increase, given that it follows an 8.8 percent increase the company implemented in September and October last year.

“The costs related to providing homeowner coverage continue to rise,” Kevin Davis, a State Farm spokesman, said in an interview. “Prices have to be adjusted to reflect that trend. Our goal is to make sure that State Farm Lloyds meets its promises to our customers.”

On Geeslin’s request that State Farm withdraw the rate increase, Davis said, “we intend to have discussions with TDI about their concerns. That’s where we are at this point.”

In its filing, State Farm said its projections suggest the company needs to raise homeowner rates by 26.5 percent, but the company opted for the 4.5 percent increase.

The company also said it was increasing its discount for policyholders who buy both homeowner and auto coverage from State Farm to 20 percent, from 15 percent. That means policyholders who have both coverage will end up paying less than the 4.5 percent homeowner rate increase.

The rate increase takes effect May 1 for new business, and June 1 for renewals.

The Insurance Department can negotiate with State Farm over the increase, or can “disapprove it,” triggering a formal process that eventually could lead to refunds.

Jerry Hagins, an Insurance Department spokesman, said his agency is still reviewing State Farm’s rate increase last fall and hasn’t taken a position on it.

“We took it in for actuarial review. That review is still active,” he said. “To get this (new) one in so soon, complicates matters.”

State Farm is Texas’ largest homeowner insurer, taking in $1.5 billion in homeowner premium in the state last year, Hagins said.

Because of the dual-policy discount, it’s too early to determine how much in added premium State Farm will raise from the increase, Hagins said.

“The discount means some policyholders will pay less than 4.5 percent, and some will pay more,” he said.

Davis said 84 percent of State Farm’s homeowner customers have multiple policies with the company, and qualify for the discount.

In his letter to State Farm executive Phillip Hawkins, Geeslin noted that State Farm has had its fall rate increase “in effect for only seven months.

“Multiple rate increases within such a short period of time may indicate a lack of rate-making discipline and lead to market instability,” Geeslin said in the letter.

With State Farm serving a third of the state’s homeowner market, “it appears that the time of this is not in the best interests of Texas consumers,” Geeslin continued. “It is my hope that State Farm Lloyds reconsider the timing of this filing and will voluntarily withdraw it.”

The case represents the latest scrap between State Farm and the Insurance Department.

In 2006, State Farm filed for a 20.8 percent rate increase. The Insurance Department disapproved that increase. After two years of negotiations, State Farm eventually filed for a 2.8 percent increase in 2008, “which we did let stand,” Hagins said.

In a separate case, Geeslin last fall ordered State Farm to repay $310 million in premiums and back interest to Texas customers for overcharging them on homeowner policies that were in place between September 2003 and July 2008.

The refund was far less than the $1 billion that consumer advocates wanted, prompting one, Texas Watch, to accuse Geeslin of being “guilty of aiding and abetting the state’s largest insurance company in its grand larceny of hundreds of millions of dollars from Texas homeowners.”

State Farm subsequently appealed the ruling.

Texas Watch ripped State Farm and Texas consumer protections over the latest rate increase, issuing a news release with the headline, “State Farm Hikes Rates Again & TDI Can’t Stop Them.”

“All the insurance commissioner can do is ask State Farm to please not gouge Texas homeowners,” Alex Winslow, Texas Watch executive director, said in the release, which acknowledged Geeslin’s “reservations.”

“The insurance commissioner shouldn’t have to beg the insurance industry for anything,” Winslow said. “Texans need protections from industry price gouging. The current scheme allows the insurance companies to dictate the market without justifying their rates to anyone.”

Zillow is Misleading!!

Don't: think that Zillow.com tells you what your house is really worth.

The "Zestimates" on this popular real estate site are based heavily on sales prices of comparable homes. So unless there's been lots of activity in your 'hood lately -- unlikely these days -- the value may not be very accurate.

Instead: Call an appraiser to size up your property in person.

It is finally starting. Drivers BEWARE!!

Construction on DFW Connector officially starts Monday

GRAPEVINE -- Many residents and traffic-worn commuters in Grapevine were probably skeptical they'd live long enough to see the area's clogged highways fixed.

But that long-awaited moment is nigh.

On Monday, a four-year, $1 billion makeover of highways in the Texas 114/121 corridor officially begins. It's a project with a nickname -- the DFW Connector -- and it entails tearing down, rebuilding and expanding eight miles of roadway squeezed between Lake Grapevine and Dallas/Fort Worth Airport. And it signals the end of more than a decade of studying the project and scrambling to find money to build it.

Now, Grapevine residents and business owners must adjust their thinking. They must let go of the skepticism that has built up over the years, when they understandably wondered whether meaningful improvements would ever come to their freeways, and focus on how to cope with traffic delays, noise, dust and other byproducts of living in a huge highway work zone.

"I'm hoping it doesn't slow down traffic to where people don't come down Main Street," said Patty Wilson, who opened Patty Cakes Bakery and Catering on Main Street last year. "I really don't know what to expect."

Drivers should be prepared to deal with a 50 mph speed limit in work zones and occasional lane closures on nights and weekends, said officials with the Texas Transportation Department and NorthGate Constructors, its private development partner.

During the first few months, much of the work will center on improving the Main Street bridge over Texas 114, the primary gateway to Grapevine's historical downtown area, as well as building a southbound Texas 121 frontage road from Interstate 635 to Texan Trail.

Grapevine residents will also have to deal with increased traffic on city streets and thoroughfares as drivers seek shortcuts to get around the work zone, although project officials don't recommend such detours.

Streets most likely to be sought out by impatient motorists include Hall-Johnson Road and Mustang Drive on the south side and Dove Road, Kimball Road and Northwest Highway on the north side.

Short Sales big in 2010

Short sales are going to be a very big part of 2010's Real Estate market.  I think more homeowners would opt for this option rather than foreclosure, if they just new the facts.

FACT:

If you let your home foreclose, you will get a bill from the IRS.  Any amount the bank can not recover on your loan becomes income to you and you are taxed on it.

FACT:

If you short sale your primary residence, President Bush signed a bill forgiving the difference for tax purposes.  You WILL NOT get a bill!  (Talk to a CPA for specific details)

FACT:

If you let your home foreclose, the bank determines when you have to be out of the property by.

FACT:

If you short sale your property, it is like a regular sale.  The date of closing and time of possession is negotiable.

FACT:

Foreclosures kill your credit and it could be 5-7 years before you can buy again.  You will always have to check THAT box on any loan application.  Plus if you work in an industry that looks at your credit, this could cost you a job.

FACT:

A short sale will lower your credit score, but not nearly as dramatic.  You will be able to buy again within 3 years providing you maintain good ratings with your other obligations.  There is NO BOX on ANY application asking about short sales.  You don't have to disclose short sales like you do foreclosures.  On your credit it shows "Settled/Paid" or some variation of that.  It probably won't cost you a job.

When it comes to doing short sales, you need an agent that understands how they are done.  We do them here in this office often and have direct contact with many banks to make this process painless. 

It really isn't a painful process as long as you realize they will want a lot of information and it does take about 4-6 weeks to get it done.  If you cooperate with the bank and your agent, it is really no different than any other home sale.