Louisiana Citizens Increases Commercial Premiums

The board of the Louisiana Citizens Property Insurance Corp. has given final approval to a 22.1 percent rate increase for its 5,734 commercial policyholders, a move that could mean an increase of about $700 in the average policy premium.

Citizens Chief Financial Officer Steve Cottrell said the increase will generate about $4 million in income for the company in the next year.

Cottrell said the average business policy is now about $3,400 annually.

The Times-Picayune reports the new rates will take effect statewide Feb. 1 for new and renewing policies.

Cottrell said Citizens policy premiums by law must be 10 percent higher than the most expensive private insurance in an area.

This year’s Citizens commercial policy premiums increased an average of 2.14 percent.

The board also voted to increase the rates on Citizens homeowner policies an average of 8.3 percent for families living in 12 south Louisiana coastal parishes hit hard by Hurricanes Katrina and Rita in 2005.

The parishes are Calcasieu, Cameron, Iberia, Jefferson, Lafourche, Orleans, Plaquemines, St. Bernard, St. Mary, St. Tammany, Terrebonne and Vermilion.

Lawmakers had exempted the parishes from the 10 percent surcharge to help homeowners save a few dollars in rebuilding and recovery but that expired Aug. 15.

The rates now in place were calculated without the surcharge so they had to be recomputed when the 10 percent was imposed.

Cottrell said the new rates do not total the full 10 percent because the numbers do not “affect wind-and-hail-only” policies.

The new rates will mean between $12 million and $13 million more in revenues for the state’s insurer of last resort. The plan had the approval of Insurance Commissioner Jim Donelon, whose office reviews all rate change requests.

The increases for the parishes are in addition to a statewide average rate increase of 6.5 percent approved in March. The increases for the coastal parishes range from 6.1 percent in St. Tammany to 10 percent in parts of Iberia Parish.

In the New Orleans area, the average rate increase in Jefferson Parish will be 7.9 percent above the Intracoastal Waterway and 8.4 percent below it. In Orleans Parish, the rates will increase by an average of 9.5 percent above the waterway and 9.9 percent below it.

Above the Intracoastal in Plaquemines, the rates will increase an average of 6.2 percent, Cottrell said, while below it the rates will increase an average of 8.3 percent. In St. Bernard the average rates will increase 8.5 percent above the waterway and 9.3 percent below it.

Average dollar increases for the 12 parishes were not available. The new rates will go into effect Jan. 1.

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