East Tennessee homeowners insurance rates expected to rise in 2012

FARRAGUT (WATE) - For months, insurance companies have been forking over millions of dollars to storm victims.

Now those companies are looking to recoup some of those losses and build up their reserves, as required by state law.

Greene County saw some of the worst storms this spring with seven people dying in the Camp Creek community alone due to tornadoes.

Many more East Tennesseans who weren't hurt still had thousands of dollars in damage to their homes, cars and other property.

Linda Nybo says her Farragut home is almost fully restored after suffering damage during the April hail storm.

She say's she filed insurance claims for more than $12,000 worth of damage. "We got hit. I remember the date. It was bad," she said.

Nybo says her homeowners insurance rate is expected to increase $300 starting next year. "About $300 a year it went up, which isn't a tremendous amount I guess, but to me it is," she said.

April's hail storm and tornadoes caused more than $7 billion of insured losses throughout the Southeast.

In the state of Tennessee, across the industry, there's been an increase in claim activity in the past three, four, five years and construction costs have seen increases as well," said Monsour Hasan, a Knoxville State Farm agent.
Hasan says his company's rate changes won't take place immediately. He says State Farm keeps up with claims it has paid out over the last 20 years. When a state appears to have a pattern of severe weather, homeowners pay more.

"A lot of the rate increases that we've seen within the industry aren't related to this specific storm. It's due to due an increase in activity within the past several years," Hasan said.

He also says Tennessee may become a more risky state for insurance adjusters, meaning higher rates in the years to come.

Hasan says higher construction costs, the age of your home, the number of claims you've had and what your home is made of all affect your rates.

Plus, for flooding coverage, a separate policy must be purchased.