05/19/03

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Recent premium increases have improved the prospects for Oregon's Big Four homeowners insurers, enough so that State Farm Insurance is once again taking on new business and Farmers Insurance and Allstate Insurance aren't boosting rates this year.

Nevertheless, State Farm and Safeco Corp. policyholders will have to dig deeper into their pockets to pay higher premiums when they renew their policies this year.

Last year at this time, companies writing homeowners policies were reeling from big losses due to above-average claims nationwide from storms and catastrophes.

To help cut potential losses, State Farm Insurance, which insures one in four Oregon homeowners, stopped taking new customers in six Western states, including Oregon, on July 1. State Farm lifted the moratorium on April 1, said company spokesman Bryan LaBerge of Portland.

The company also raised its rates 21.5 percent last May; it is raising them another 21 percent beginning this month. The rate increases are state averages, so individual homeowners may see differing amounts. To help lessen the blow of the increases, LaBerge said, the discount for buying both homeowners and auto insurance from State Farm has been raised from 5 percent to 15 percent of combined premiums.

Meanwhile, Farmers, which has 20.5 percent of the Oregon homeowners market, increased premiums by 9 percent last May but doesn't anticipate another increase this year.

"Our losses are improving dramatically," said Joe Moss, Farmers executive director for Oregon. If trends stay the same, the company isn't likely to increase premiums until at least September, if then, he said.

Allstate and Safeco share the bulk of the remaining homeowners market in Oregon.

Allstate took a 9 percent increase last September and has no plans for another one at this time, said spokeswoman Darcy Olson of Seattle.

Safeco raised its premiums 16.7 percent last July and plans to bump them up again by 9.9 percent this July, the company reported.

Earthquake insurance, which can be purchased as an option with homeowners coverage, still is being sold in Oregon, despite recent minor quake activity, the companies report. Insurers often put 60-day moratoriums on new earthquake policies that apply to areas within a 100-mile radius of the epicenter after earthquakes of 4.0 or so on the Richter scale.

The cost of earthquake coverage has not increased because of recent activity, the companies reported.

Oregon's average annual homeowners policy premiums are low, compared with the other 49 states and the District of Columbia, says Krista Fischer, spokeswoman for the Insurance Information Service of Oregon and Idaho.

A 1999 comparison showed Oregon was 47th, with an average premium of $334. At the time, Texas had the highest average in the country, at $861.

More up-to-date information did not show state-by-state comparisons. The national average premium in 2002 was $553, rising to $603 this year. Fischer said premiums are expected to rise another 9 percent on average nationwide by the end of this year.