Latest news with #rateincrease
Yahoo
14-07-2025
- Business
- Yahoo
State Farm defends hefty 27.2% hike in Illinois homeowners insurance rates
Challenged by everyone from consumer groups to Gov. JB Pritzker over its imminent 27.2% homeowners insurance rate increase in Illinois, State Farm faces the question: Will it seek to defend its widely criticized decision? The answer: hail yes. Citing more frequent extreme weather events such as wind, hail and tornados, insufficient premiums to cover claims and the rising cost of repairs due to inflation, State Farm said its Illinois homeowners business has seen 'unsustainable' losses in 13 of the last 15 years. It needs to raise rates to remain 'financially strong,' the company said in a statement. 'These losses are driven in part by severe weather damaging communities across the state,' State Farm said. 'No company can absorb such losses forever and still be there for customers when disaster strikes.' In 2024, for example, State Farm paid out $1.26 in claims for every $1 premium collected from Illinois homeowners, the insurance giant said. That included $638 million in hail damage claims, second only to Texas. The rate increase, first reported by the Tribune last week, has created a political firestorm for Bloomington-based State Farm, the largest home insurer in Illinois. State Farm is raising homeowners insurance rates in Illinois by a whopping 27.2% beginning Aug. 15, according to a filing with the state last month. The rate hike, one of the largest in the state's history, will affect nearly 1.5 million policyholders. New policyholders will pay the higher rates as of Tuesday. In addition, State Farm is implementing a minimum 1% deductible on all wind and hail losses, raising the out-of-pocket costs for homeowners filing a related damage claim. On Thursday, Pritzker issued a statement expressing concern over State Farm's 'unfair and arbitrary insurance rate hike,' challenging the methodology used to calculate the increased premiums to be paid by Illinois homeowners. Pritzker said the increases are based on catastrophe loss numbers that are inconsistent with the Illinois Department of Insurance's analysis, concluding that State Farm was shifting out-of-state costs onto Illinois homeowners. In its statement, State Farm said it does not shift costs between states and dismissed Pritzker's claims as 'political rhetoric.' The insurance company said it has provided information to the state to support its position. 'Illinois rates are based on Illinois risk — it's as simple as that — not for losses in other states,' State Farm spokesperson Gina Morss-Fischer told the Tribune on Monday. State Farm has been hit hard by recent weather-related losses in other states. For example, the insurance company has received nearly 13,000 claims and paid out more than $4.2 billion to California homeowners who suffered losses during the devastating wildfires that raged across the Los Angeles area in January, according to an update posted last week on its website. While State Farm contends that out-of-state losses do not directly affect Illinois premiums, at least one industry analyst said there is a potential connection. If losses are big enough in one state, insurance companies may have to pay more for reinsurance — the insurance company for the insurance companies — resulting in increased rates for policyholders across the country, according to Shannon Martin, an industry analyst for Bankrate. In addition, as people rebuild from wildfires in California to floods in Florida, the increased costs of everything from labor to materials can deplete resources and make it more expensive to do repairs in other parts of the country, including Illinois, Martin said. 'You don't operate in a vacuum, and you can't, because we're all part of a risk pool,' Martin said. 'When there's loss in one area, everyone's going to feel it in some way, shape or form.' The increased frequency of extreme weather events has pushed up homeowners insurance rates across the country by 40.4% over the past six years, according to LendingTree's 'State of Home Insurance' report for 2025. Illinois had the seventh highest increase, rising 59.5% between 2019 and 2024, the report found. In February, Northbrook-based Allstate raised homeowners insurance rates by 14.3% for nearly 248,000 Illinois customers. Last year, Allstate raised homeowners insurance rates in Illinois by 12.7%, while State Farm implemented a 12.3% increase. State Farm's latest and likely largest-ever Illinois increase has renewed calls for broader legislation to regulate the rates insurers can charge homeowners. Unlike most states, in Illinois, which is home to both State Farm and Allstate, insurers do not need regulatory approval to raise premiums. Legislation is pending in Springfield that would require regulatory approval of larger rate hikes. 'It's time for the General Assembly to act,' Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization, said in a statement. 'At a minimum, Illinois should empower the state Department of Insurance to reject or modify excessive rate hikes, a basic consumer protection that residents in almost every other state enjoy.' At the same time, increased regulation can precipitate companies to abandon markets where it is no longer profitable to insure homes exposed to more frequent weather events. A December report by the Senate Budget Committee said insurance markets have been destabilized from New England to Hawaii as providers decline to renew homeowners policies. 'Having more oversight, on one hand, could really help homeowners, but on the other hand, if carriers don't want to be there, that puts homeowners in a pickle,' Martin said. 'So it's about finding that balance where people can find affordable and available insurance at a rate that insurance companies are satisfied that they're profitable.' Illinois ranked 22nd in average annual home insurance costs at $2,743 per year, according to the LendingTree report. A 27.2% rate increase would add about $746 per year to that total for Illinois homeowners who have State Farm insurance. While homeowners rates are going up, State Farm is offering a bit of good news for Illinois customers this week. On Friday, State Farm's auto insurance rates in Illinois will decrease an average of 5.7%, with some customers seeing reductions in premiums of up to 15%, based on lower projected claims costs, the company said. rchannick@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
08-07-2025
- Business
- Bloomberg
New Board Member Hints at Possible Raising of BOJ Price Outlook
One of the Bank of Japan's newest board members alluded to a possible upward revision to the central bank's inflation view this month, an outcome that would keep open the possibility of another rate increase this year. 'Inflation for rice and food-related items has been stronger than expected,' Junko Koeda said Monday in her first media interview since joining the board in March. 'I'm closely watching potential secondary effects on underlying inflation from rice, which is a staple food.'
Daily Mail
08-07-2025
- Business
- Daily Mail
Aussies slugged with biggest rate rise in the STATE after council increases it by an absurd amount
A Queensland council has handed down the state's biggest rate increase on record, slugging residents with a 25 per cent hike. The North Burnett Regional Council passed its $69million 2025-2026 budget on Monday. The budget included a 25 per cent increase on all general rates and a 19 per cent increase on water and water levies. The council is one of the largest in Queensland and covers an area of 19,700sq kilometres including the townships of Biggenden, Eidsvold, Gayndah, Monto, Mt Perry, Mundubbera and an additional 25 villages and farming catchments. The rates will directly impact the region's 10,500 residents. Council was divided, with three of its members voting against the bill while four voted in favour of the motion. Those in favour were Mayor Les Hotz and councillors Michael Dingle, Susan Payne and Renee McGilvery. Meanwhile, councillors Trina Vaughan, Moira Thompson and Melinda Jones voted against the motion. In a fact sheet released on the council's website on Monday, the council explained the need for such a significant rate increase. 'For many years, the North Burnett Regional Council has not generated or received sufficient revenue to cover the increasing costs of delivering Council services,' it reads. 'Every single service provided by Council costs money to deliver. Everything Council does must be paid for by the ratepayer, the service user or through limited and uncertain grants from other tiers of government. 'Like every household and every business in the North Burnett, the cost of living and operating has been increasing significantly since the COVID pandemic. 'In the absence of any significant increase to the Commonwealth Government's Financial Assistance Grant, the only other principal source of revenue to fund the continuation of Council services is through rates, utility charges and user-pays fees and charges.' The council fact sheet explained the 25 per cent rate rise would translate to an additional $31.49 a fortnight on minimum general rates for homeowners. It also added that council operated at a $4.207million deficit in the last financial year after it received an 'unexpected receipt' in June of a 50 per cent advance payment from the Commonwealth Financial Assistance Grant. Hotz said the rate increase was necessary to pay for council's utilities and services without having to rely on additional government grants. He added the rate increase would amount to more than $800 for local taxpayers every year. 'We've been upfront about the challenges we're facing,' he said. 'These changes are a necessary step toward building a more sustainable Council, one that can continue to serve the North Burnett community both now and in the future. 'These increases are necessary to support Council's financial sustainability and to maintain the services our residents have told us matter most to them.' 'Council is fully aware of the potential impact rates and charges increases may have on our community.' Hotz explained revenue from the increased rates would curb council's $2.6million deficit and bring it up to $8million by the end of the 2025 to 2026 financial year. Council has also instituted a number of policies to support or provide relief for ratepayers struggling with the increased fees. The bill received widespread backlash, with many residents claiming the massive increase would mean they now have to cut down on necessities. Pensioner Colin Boot, who witnessed the budget meeting, was outraged by the 25 per cent increase. 'Ten per cent — we would have coped with it somehow, but 25 per cent?' Mr Boot told the ABC. I just can't see where we're going to get that extra money… the only thing I can see is (cancelling) insurance.' Former councillor Dael Giddens claimed the massive rate increase would impact the region's children. 'You might have had the kids playing cricket and soccer and doing swimming. They may only get to choose one, so unfortunately that will have an effect on our children,' Mr Giddens said. Mundubbera resident Rachel Cumner launched a petition on calling on the council to cap all future rate rises in line with the Consumer Price Index.
ABC News
07-07-2025
- Business
- ABC News
North Burnett Regional Council hands down Queenland's biggest rate increase
A Queensland council has blamed spiralling costs and stagnant growth for a record rate increase. The financially struggling North Burnett Regional Council raised general rates by 25 per cent in its $69-million, 2025-26 budget delivered on Monday morning, surpassing Townsville City Council's recent 20 per cent increase for some owner-occupiers. All separate charges, such as sewerage, water and waste, as well as and levies for local disasters, natural resource and landfill management have increased by 19 per cent. Mayor Les Hotz said the increase – which would amount to more than $800 per year for residential ratepayers – was necessary to pay for council's utilities and services without relying on additional government grants. He said the added revenue from the increased rates and fees would shave about $2.6m off the council's deficit and bring it down to about $8m at the end of this financial year. "We're just trying to meet the costs without having to reach out and ask our state and federal government to assist," he said. "I'm sympathetic toward the the ratepayer that is struggling, the pensioner and those that do not have work. Pensioner Colin Boot was in the public gallery for the budget meeting at Gayndah Community Hall. The 81-year-old Gayndah resident said he would have to cut down on other expenses. "I just can't see where we're going to get that extra money … the only thing I can see is [cancelling] insurance," Mr Boot said. "Ten per cent — we would have coped with it somehow, but 25 per cent?" Resident and former councillor Dael Giddens said families would likely cut back on after-school activities. "You might have had the kids playing cricket and soccer and doing swimming," she said. The North Burnett region is one of the largest in the state, covering almost 20,000 square kilometres and a total of more than 4,800km of sealed and unsealed roads owned by the council and the state government. Chief executive Craig Matheson said council's approach to the budget was guided by previous community consultation that "unequivocally showed" that residents wanted existing services retained. "It was a challenge, but we knew without a doubt what the community wanted," he said. Mr Matheson said costs had increased by 10 per cent in recent years but the ratepayer base of 6,323 properties had only grown by one per cent in the last decade. First-term councillor Trina Vaughn voted against the budget because of the added burden it would place on ratepayers already struggling with the cost of living. "I've spoken with people who are going without medication because they just can't make ends meet," she said. "It's definitely a problem that has been imposed on us by the current climate and it's not just a North Burnett Regional Council problem — it is Australia-wide." Deputy Mayor Melinda Jones voted against the budget but was in favour of raising fees and charges. "We've weathered fires and floods and now we need to weather something else — the cost of catching up," she said. The budget's long-term forecast indicates that the council's cash reserves will dwindle to less than one month's operating expenditure before rising above the target of four months by 2032-33. Local Government Association of Queensland (LGAQ) chief executive Alison Smith said the rate increase showed councils had "reached a tipping point" beyond which they could no longer pay for community services.
CBC
25-06-2025
- Automotive
- CBC
Manitoba Public Insurance wants 2% rate hike for 2026
Social Sharing Manitoba Public Insurance has filed an application with the province's Public Utilities Board to raise its rates starting next April. The Crown insurance corporation is seeking approval for a 2.07 per cent increase to the overall rates of its universal compulsory automobile insurance for the 2026-27 fiscal year, MPI said in a Wednesday news release. If approved, the owner of an average private passenger vehicle would pay $21 more a year, MPI said in a news release Wednesday. The corporation says it has worked to keep insurance rates affordable in Manitoba, but insurance companies across North America are dealing with a volatile market, where the cost of claims continues to climb. Modern cars are more complex and contain advanced technology that is more expensive to repair, MPI said. The new rates, if approved, would be effective April 1, 2026, MPI said, but because renewal dates are staggered, some vehicle owners wouldn't see the new rates until March 31, 2027. The Public Utilities Board normally issues its order in December, MPI said in its release. Last year, MPI requested a three per cent increase to insurance rates. However, in January, the PUB rejected that request, and instead ordered MPI to raise its basic rates by 5.7 per cent for the 2025-26 fiscal year. The independent regulator stated in its decision that approving the requested lower rate hike would lead to "much higher" rates in future years. Changes to driver ratings, deductibles proposed The corporation is also applying to the Public Utilities Board to expand its merit scale, to include a new level driver safety rating. Currently, the scale tops out at Level 19, at which drivers get a $30 discount on their licence renewal (which has a base fee of $55) and a 48 per cent discount on their vehicle premium. If approved, those who move into the new Level 20 would save 53 per cent on the cost of their driver's and vehicle insurance, MPI said. MPI's rate application also proposes changing the deductible for its basic insurance, increasing it from $750 to $1,000. That change is needed to "keep the basic product affordable and comprehensive," the insurer says. It would also add a new $750 option to the list of lower deductibles it offers, which includes $200, $300 or $500 deductible options.
