Insurance rates for 480,000 homeowners covered by Allstate Texas Lloyds will rise an average of 5.5 percent next month, but a state consumer advocate says the increase isn't justified.

Allstate submitted the increase to the Texas Department of Insurance for review. The new rates would take effect starting with policies that are up for renewal Aug. 27.

Bill Mellander, an Allstate spokesman, said the company needs to raise rates because of rising claims costs. He declined to say how many Central Texas homeowners will be affected.

The increases will be much higher for people who live along the Texas coast, which suffered substantial losses from Hurricane Ike last year.

Rates will rise an average of 15.6 percent in Harris County and 9 percent in Galveston County.

North Texas homeowners face an average 6.2 percent increase. That area has been hit by heavy hailstorms in recent years.

Under state law, insurers can impose rate increases after submitting them to regulators without getting approval. But the Department of Insurance can order a rate cut and refunds if regulators determine that the increase is not justified.

Jerry Hagins, a spokesman for the state insurance department, said Allstate's increase is under review.

The Office of Public Insurance Counsel, which represents consumers, called the increase "unreasonable" in a letter to regulators, the Houston Chronicle reported.

"Based on our preliminary review, OPIC believes no increase in the rate level is supported and that the company's existing rates are likely excessive," executive director Deeia Beck said.

The company should have used more than one hurricane model to predict future losses, she said.

Allstate Texas Lloyds has not taken on any new customers since 2006. A related company, Allstate Fire and Casualty, has about 120,000 customers and is not involved in this rate increase.

Farmers Insurance, one of the other major home insurers in Texas, said last week that it will raise rates for Texas customers by an average of 9.5 percent. State Farm has not raised rates since last August.

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