California Homeowners' Insurance Rates lowered

December 28, 1006

Farmer's Insurance--California's second largest homeowners insurer--will lower its rates in the state by 18 percent, Joining State Farm, Safeco, Hartford, USAA, Nationwide and Kemper in heeding Insurance Commissioner John Garamendi's call for lower rates.

Farmer's rate cuts apply to the company's Special Form, Protector Plus, Renters and Condominium Owners policies, and are likely to take effect in June 2007, the Department of Insurance said in a statement.

After a study concluded that four of the state's insurer's were paying less than 50 percent of each premium dollar on claims, Garamendi in June 2006 ordered Allstate, State Farm, Farmers and Safeco Insurance to justify their homeowner rates. The study found that auto and homeowners insurers experienced historically low loss ratios in 2004 and 2005.

Here's hoping that these low loss ratios continue and that insurers will continue to keep the homeowner rates lower.