The Dallas Morning News reported yesterday that State Farm is giving Texas policy holders an average 2 percent rate increase next month, citing higher medical costs as the main factor in the decision.

The Texas Department of Insurance has been notified by the largest subsidiary of the insurer, State Farm Mutual, that the rate increase will go into effect on renewals and new customers on August 16th. State Farm County Mutual, another State Farm subsidiary which mainly insures high-risk drivers, will also increase its rates next month, by an average of 6.8%. These increases affect 3 million, and 230,000 Texas drivers, respectively.

Deesia Beck, a public insurance counsel whose office represents insurance consumers in the Lone Star state, filed objections to the rate increases on Tuesday, stating that State Farm doesn’t have good enough justification for such a hike. She called on Mike Geeslin, state insurance commissioner, to reject the increase.

In a letter to the insurance department, Beck said, “The filing would, if implemented, produce rates that are excessive, unreasonable and unfairly discriminatory.”

An insurance department spokesman said the rate filing is under review.

Kevin Davis, a spokesman for State Farm, said the increase was filed “…primarily to address rising costs associated with bodily injury liability claims, such as medical costs.” She also said that even with this latest rate hike, State Farm Mutual’s rates have dropped by 6.6 percent overall, since 2004.