Average rate increases of 23 percent for homeowners insurance have socked Michigan residents in 2002, after several years of little or no increases.

State Farm Fire and Casualty Co.'s average 17.9 percent increase took effect Sept. 1, 2002. This follows an average 14.1 percent rate hike that went into effect in January 2002.

Pressure for the rate hikes has been building for more than a year.

"The cost of claims has been increasing, for building materials, labor, medical costs, and all of this has not been weather-related," says State Farm spokesperson Angie Rinock. She says costs have increased 50 percent since 1998 for non-catastrophic losses.

Rinock says pressure for the rate hikes has been building for more than a year. She says in 2001 State Farm paid out $1.62 for every dollar in premiums it collected. State Farm is the largest home insurer in Michigan, covering one in five houses in the state.

"From 1996 through 2000, many of the companies had profits in their other product lines, like auto, and investment income that held down premiums," says Julie K. Smith, spokesperson for the Michigan Office of Financial and Insurance Services.

The 23 percent average hike is not across the board, Smith says, as some companies requested increases of as low as 5 percent to as high as 80 percent. She says no other rate increases are pending in 2002.

And the increases occurred without any significant weather event, like major winter storm damage or an active tornado season, which could send rates spiraling again, Smith says.