Homeowners in Louisiana may see their insurance rates jump as the state’s own Citizens Property Insurance company proposes new, higher rates. The state-run insurer, which accounts for more than 120,000 policies, is looking to raise rates throughout the state by an average of 10.5%. For some parts of the state – particularly those near the coast – these rates will be higher. Insurance Commissioner Jim Donelon is currently reviewing the rate increase proposal to see if it is needed in the current market.
The insurer claims that higher rates are necessary to offset the losses it has seen from recent natural disasters. Several wind and hailstorms have caused a significant amount of damage in some parts of the state. Many homeowners in Louisiana do not have insurance to cover these types of events. Those without coverage can expect to see rate increases of 2.4%. Those with this coverage, however, can expect to see rates to jump by an average of 58%. This is to offset the sheer risk presented by those without appropriate insurance policies.
Regulators will take time to review the new rate proposal and determine whether Citizens can proceed in collecting premiums at the new rates. If regulators reject the proposal, the insurer will have to find a way to rework it according to the demands of the Insurance Commissioner. Regulators may require the insurer to provide additional justifications for the higher rates whether they plan to reject the proposal or not.
For more insurance news and updates.