Louisiana’s many recent natural disasters are having a drastic effect on residential property insurance availability and rates. Here are the details.
Citizens residential property insurance rates to increase 63%
Louisiana’s Insurance Commissioner has approved Citizens, a residential property insurer, to increase rates by 63% on policies that are started or renewed after January 1, 2023. The staggering increase is a direct result of the insurance payouts after natural disasters like Hurricanes Katrina, Rita and Ida. Ida alone resulted in $10.5 billion in payouts.
Efforts to attract other insurers to Louisiana
Insurance Commissioner Jim Donelon says he is working with the state legislature to attract more insurance companies to the state. The logic is more competition will bring rates down.
Currently, Citizens is Louisiana’s insurer of last resort, meaning Citizens insures homeowners who cannot get coverage through any other insurer. Six insurers have declared insolvency after numerous massive disaster payouts. A total of seven insurers have shut down service in the state since Hurricane Ida in 2021.
Fortunately, 2022 has been a quiet hurricane season for Louisiana, though that’s little consolation for people who are still rebuilding after Hurricane Ida in 2021.
Options for Louisianans
While the news right now is pretty bad, insurance developments can change quickly. If you have had trouble getting home insurance in the past or are looking for other options before Citizens’ rate hikes take effect, you can try calling independent insurers at least once a month for rates. If the legislature is successful, there will be new home insurance options, hopefully in the near future.
If you are a Citizens customer and you are able to find coverage through another insurer before the end of your policy term, Citizens will refund the unearned premium.
If you are currently waiting on an insurance payout that is in dispute, contact an experienced attorney who can help move the process along.