La. State Insurance Program to Seek rate Increases

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Louisiana Citizens Property Insurance Corp., the state’s insurer of last resort, wants to increase homeowners rates by an average 31.7 percent for its 135,000 policyholders.

Citizens, the third-largest insurer in the state, also will ask the Louisiana Rating Commission for permission Nov. 15 for a 129.6 percent average rate increase for its commercial property coverage and a 68.2 percent increase for its wind-only homeowners policies.

The homeowners’ cost increases would vary depending on the parish.

A few homeowners customers could see their rates skyrocket by 261 percent, according to Citizens’ filing with the rating commission. The average cost of a Citizens homeowners policy is now around $1,400 a year.

“I would suspect that you can expect a rate increase next year for Citizens as well, based on what the other companies are getting,” said Terry Lisotta, secretary of Citizens. “It could be substantial.”

Under state law, Citizens must charge 10 percent more than the average of Louisiana’s top 10 private insurers, as well as any company that writes more than 3 percent of the business in a parish. Earlier this month, Allstate announced it plans to seek substantial homeowners rate increases for the next several years.

If private insurers seek hefty increases, Lisotta said Citizens will have no choice but to follow suit. Citizens writes insurance for customers who can’t get it with other traditional insurance companies.

Citizens homeowners filing would generate close to $60 million in premiums for the company. The Insurance Department is still reviewing the rate requests and has not determined if they are justified, spokeswoman Bobby Clark said.

Citizens is split into two parts: the FAIR Plan, or Fair Access to Insurance Requirements, and the Coastal Plan, which covers the coastal parts of the state.

FAIR customers make up approximately 90 percent of Citizens policies, Lisotta said.

Under the rate filing, Coastal customers will see rates rise an average of 49 percent; FAIR customers, 30.3 percent.