Texas regulators have approved several significant homeowners' insurance rate increases in the fourth quarter of 2023, making it one of the most impactful states in terms of rate hikes in the United States. According to an analysis by S&P Global Market Intelligence, Texas regulators cleared 46 rate increases during the quarter, with 10 of them ranking among the most substantial in the country.
One of the most significant rate hikes was granted to State Farm General Insurance Co. by California state regulators. The company's overall rate was increased by 20%, resulting in a calculated premium change of $480.40 million. This rate hike will impact nearly 2 million policyholders starting March 15, 2024. State Farm's subsidiary in Texas also implemented a substantial rate hike of 6.1%, equating to a calculated premium increase of $165.17 million.
State Farm subsidiaries received approvals for a total of 15 rate increase requests, with six of them exceeding 10%. The aggregate total of approved rate hikes for the group in the last quarter of 2023 amounts to $968.68 million. It is important to note that these figures are based on as-reported numbers filed in the rate filings of each subsidiary and do not represent a final projection of the additional premium the insurer may receive in the upcoming year.
Liberty Mutual Holding Co. Inc. is another insurer that received significant rate increases in the quarter. The company obtained approvals for rate hikes exceeding 25% in seven instances, making it the insurer with the highest number of approved rate increases at 164. The calculated premium change for Liberty Mutual's approved filings adds up to approximately $803.65 million.
In addition to State Farm and Liberty Mutual, other insurers also experienced substantial rate hikes. Rock Ridge Insurance Co., a subsidiary of Clear Blue Insurance Co., received the largest rate increase in the quarter, a staggering 53.9% in Tennessee. This rate hike affected more than 12,000 policyholders and went into effect on October 17, 2023, for new business and December 17, 2023, for renewal business.
It is worth noting that different US states employ various rate regulation mechanisms, including prior approval, modified prior approval, file and use, as well as use and file. Some states do not require explicit regulatory approval prior to insurers implementing new rates. The analysis conducted by S&P Global Market Intelligence is based on when rate filings are "disposed" by state regulators and does not consider when those new rates became effective for new and renewal business.
Texas's acceptance of these significant homeowners' insurance rate increases underscores the ongoing challenges faced by policyholders in the state. As insurance rates continue to rise, homeowners must carefully consider their coverage options and seek competitive quotes to ensure they are adequately protected.