Citizens Property Insurance is making cuts to homeowners insurance premiums
Louisiana’s Citizens Property Insurance has announced that it will be lowering homeowners insurance premiums beginning on June 30. The state-run agency’s board of directors voted to approve rate reductions, which may reduce the financial pressure of homeowners with coverage through the state. Citizens Property Insurance notes that the driving factor behind rate reductions is the falling cost of reinsurance. This year, the cost of the agency’s reinsurance coverage is expected to fall by as much as 5%.
Average cost of insurance coverage is affected by where homeowners are located
The average cost of homeowners insurance policies offered by Citizens Property Insurance is $1,680. This cost varies depending on where people live. Those living in coastal areas of Louisiana will pay more for their coverage due to their exposure to natural disasters, such as hurricanes and floods. Many homeowners had expressed concern over growing rates in the past, but the state-run insurer has managed to mitigate costs with the help of a relatively calm storm season.
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Falling reinsurance costs allow Citizens to provide better savings to consumers
Citizens Property Insurance expects to save some $5 million on reinsurance costs in 2016. These savings will extend to homeowners, who will see their premiums fall be a certain percentage. Notably, rate decreases are coming to coastal areas. In Jefferson Parish, homeowners in coastal areas will rates drop by an average of 6.4%. In coastal areas of Orleans, rates will fall by an average of 5.6%.
Private insurers help reduce Citizens’ exposure to risk, leading to falling homeowners insurance premiums
Another issue that is affecting the cost of homeowners insurance is the fact that Citizens Property Insurance is no longer the only company offering coverage in Louisiana. In 2012, Citizens Property Insurance was the only insurer willing to take on risks associated with homeowners. Now, however, a small number of private companies are beginning to provide coverage to consumers looking to protect their properties. This has limited Citizens’ exposure to risks and provided the company with a certain amount of financial leeway.