In America thousands of farmers will see their home insurance policies balloon with an increase of 9.9% next year.

Michelle Levy said that the rise was not due to the after affects of Hurricane Ike but was put into place because farmers needed the increase to cover rising labour and material costs.

Levy commented: “This rate action has been in the works for months, long before hurricanes Dolly and Ike, as part of our annual review of rates.”

The insurance company which sells home insurance through its Texas companies Farmers Insurance Exchange, Fire Insurance Exchange and Texas Farmers Insurance Co notified state regulators of the new rates.

Jerry Hagins from Texas Department of Insurance said: “We are reviewing it right now. It doesn't go in for effect until February 16th, so that's a good amount of time for us to review them.”

Out of Farmers 760,000 policy holders in Texas half will be affected by the hiked rates.  In an attempt to compete with the market Farmers will decrease rates an average 10% for condo policies.

USAA last month claimed that it will increase Texas home insurance rates by 7.9% due to risks from hazardous weather.