2.3% Rate Hike for Louisiana Citizens Property Insurance Approved

Louisiana’s property insurer of last resort will raise personal property insurance rates by 2.3% this year, the state insurance department said.

The increase is in line with current inflation rates and evidences stability and appropriate rates in Louisiana’s residential insurance market. By law, rates at Citizens, Louisiana’s market of last resort, must be higher than the private market for home insurance.

“Citizens is currently in a strong financial place despite the multiple hurricanes that hit Louisiana during the last storm season, resulting in a minimal overall increase needed to continue to provide property insurance to Louisiana’s most vulnerable policyholders across the state,” Insurance Commissioner Jim Donelon said in a media release.

Citizens insures properties that can’t find coverage in the private market. Many of these properties, residential as well as commercial, are in locations where private insurers don’t want to do business, including approximately 1,000 policies in the Shreveport area and 1,000 in the Monroe area.

Commissioner Donelon approved the rate filing of +2.3% for personal property policies in the FAIR and Coastal Plans after the proposed rate change was found to be appropriate based on actuarial and market analysis in compliance with Louisiana law.

The rate change will affect approximately 34,400 policies and takes effect for both new and renewing policies starting on June 1.

The new rates are in line with those in the previous five years, as outlined below.

In January, Citizens completed its 14^th round of depopulation in which selected policies are made available to private insurance companies with the goal of lowering premiums for policyholders in the Louisiana market. Because of its strong reinsurance program, Citizens estimates that it will pay only $35 million of the estimated $97 million in claims it will receive for the 2020 hurricane season, with reinsurance companies paying the rest.

Source: Louisiana Department of Insurance

Topics Louisiana Pricing Trends Property