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Allstate Expected To Raise Illinois Homeowner Insurance Rates

2010-04-30

In response to an increase in the number and harshness of homeowners insurance claim losses, Allstate says that it will raise homeowners' rates by an average of 8 percent starting in July. The result will be an average increase of between $67 and $82 a year or $6 to $7 a month, said the company.

However, the company has announced a series of discounts on auto insurance including a 7 percent decline to auto customers who pay their bills in full. In addition, there will be five new deductible options for Allstate auto insurance customers and more incentive for customers to bundle their homeowners and auto insurance policies with Allstate. The plan is said to favor people with two cars and a residence. The package will include a discount of up to 54 percent on the car if the customer bundles the car and home insurance with Allstate. Certain conditions on the discount must be met such as paying the bill using EZPay and paying the premium in full.

Moreover, in an attempt to lure Geico customers away from that company, Allstate will offer a 5 percent decline in auto rates to Geico policyholders who sign up with Allstate. Qualifying customers who switch would receive a 5 percent discount.

Allstate increased homeowners insurance rates in Illinois by as much as 28 percent in 2009. The move was in conjunction with the increase in insurance premiums by other top insurers in the state. That move was taken to recoup losses in previous years.

It appears that homeowner insurers have suffered a larger pay out of claims due to severe weather including tornadoes, hail and wind storms. Home insurance experts have said that the severe weather has been of record proportions for the last few years.

The economy continues to slam the nation's homeowners with many still suffering conditions that make them pay more than their house is worth. Foreclosure rates continue to be high too.

So the actions taken by Allstate appear to be a mixed bag for consumers. The home continues to be a drain on the pocketbook and bank account, but companies like Allstate are trying to lessen the sting by offering breaks on auto insurance.

Allstate is the nation's second largest auto insurance provider. The company will garner $17.4 billion in direct premiums during the fiscal year that ends in June. Still, premiums received were down 4.6 percent compared to the previous fiscal year. On the other hand, Geico witnessed an increase of its direct premiums by 8.1 percent to $13.1 billion. Geico is the number two provider of auto insurance in the country. The race to get homeowners will continue to rage between the two companies.