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Louisiana Citizens proposes 63 percent homeowners insurance rate hike for 2023
Posted on 9/13/22 at 2:54 pm
Posted on 9/13/22 at 2:54 pm
NEW ORLEANS (WVUE) - Policies continue to balloon for Louisiana Citizens, the state’s homeowners insurer of last resort, leading the corporation to file for a 63 percent rate hike on all new or renewed residential policies as of Jan. 1, 2023.
Louisiana Insurance Commissioner Jim Donelon said at a town hall meeting Monday (Sept. 12) in Jefferson Parish that Citizens is currently at 114,000 policies, up from just 37,000 in 2021.
As insurance companies continue to flee Louisiana, either becoming insolvent or refusing to write new policies south of I-12, more homeowners are being forced onto the state-backed insurer of last resort.
Donelon said his goal is to get more companies writing policies in Louisiana, in order to stoke competition and drive down premiums.We have plans in place to depopulate Citizens, and have significant interest being shown by companies that are anxious to get those policies out of Citizens,” Donelon said. “(These are) solvent companies that are looking forward to doing business -- competitive business -- with each other in the property insurance market, even below I-10 and I-12.”
Donelon said he plans to impose a program that hasn’t been used since the months and years following Hurricane Katrina, incentivizing private companies to start writing policies in the state.
He said the groundwork is being laid, but that funding from the state legislature will be needed.
State Senator Cameron Henry told the small crowd that he, Donelon and State Sen. Kirk Talbot had been working with other lawmakers at the state capital to “kick-start” that program again. Louisiana making history again
Louisiana Insurance Commissioner Jim Donelon said at a town hall meeting Monday (Sept. 12) in Jefferson Parish that Citizens is currently at 114,000 policies, up from just 37,000 in 2021.
As insurance companies continue to flee Louisiana, either becoming insolvent or refusing to write new policies south of I-12, more homeowners are being forced onto the state-backed insurer of last resort.
Donelon said his goal is to get more companies writing policies in Louisiana, in order to stoke competition and drive down premiums.We have plans in place to depopulate Citizens, and have significant interest being shown by companies that are anxious to get those policies out of Citizens,” Donelon said. “(These are) solvent companies that are looking forward to doing business -- competitive business -- with each other in the property insurance market, even below I-10 and I-12.”
Donelon said he plans to impose a program that hasn’t been used since the months and years following Hurricane Katrina, incentivizing private companies to start writing policies in the state.
He said the groundwork is being laid, but that funding from the state legislature will be needed.
State Senator Cameron Henry told the small crowd that he, Donelon and State Sen. Kirk Talbot had been working with other lawmakers at the state capital to “kick-start” that program again. Louisiana making history again
24
Posted on 9/13/22 at 3:00 pm to BowDownToLSU
good lord 
Posted on 9/13/22 at 3:00 pm to BowDownToLSU
Damn. 63% inflation is even worse than beef and chicken.
Posted on 9/13/22 at 3:02 pm to Pedro
quote:
good lord
the commercial side already getting 70% rate increase eff. 11/1. Anyone with commercial book that may be heading to Citizens may want to get it written before 11/1.
Posted on 9/13/22 at 3:11 pm to BowDownToLSU
I can’t imagine what a 63% increase of LA CITIZENS premiums looks like. Holy crap!
Posted on 9/13/22 at 3:11 pm to BowDownToLSU
A live look at LA Dept of Insurance-
Posted on 9/13/22 at 3:13 pm to BowDownToLSU
When more than half of your population is completely funded by the government dole things start to turn to complete shite
I am absolutely shocked that people with more than zero dollars of worth remain
I am absolutely shocked that people with more than zero dollars of worth remain
Posted on 9/13/22 at 3:16 pm to Caraway Rye
quote:
When more than half of your population is completely funded by the government
this is more like the population is funding the government.
Posted on 9/13/22 at 3:18 pm to BowDownToLSU
quote:
Donelon said his goal is to get more companies writing policies in Louisiana, in order to stoke competition and drive down premiums.
Really, we have high premiums because there isn’t enough competition? There’s just loads of profit to be made by an enterprising new insurance company, all they have to do is undercut these established companies? Current premiums have nothing to do with the current high cost of repairs or replacement of homes?
Posted on 9/13/22 at 3:20 pm to Caraway Rye
quote:
I am absolutely shocked that people with more than zero dollars of worth remain
We all hate living here but this is home to those of us with older parents and young children. My in-laws only have us and they’re old so we’re not going to leave them. By the time they pass away, my own parents will be old and will need us. I also don’t want to uproot my kids and put them in another school. So, all things considered, this is home to us. Do we like living here all the time? Nah, but this is where we will be for the foreseeable future.
Posted on 9/13/22 at 3:21 pm to Jack Bauers HnK
more deets
The board approved an overall average residential property insurance rate increase of 63.1% on new and renewal business effective January 1, 2023.
LA Citizens rates are statutorily set at 10% above the highest market rate in each parish or the actuarial rate, whichever is higher. Historically, residential rates have been primarily driven by market rates. However, this rate increase is driven by actuarial rates needed to pay for the dramatically increased cost of reinsurance.
In 2021, LA Citizens had approximately 37,000 policies with TIV of $7 billion. LA Citizens bought $55 million reinsurance at a cost of roughly $32 million.
For 2022, LA Citizens estimated that they would have 80,000 policies with TIV of $27 billion during storm season. LA Citizens bought $1.2 billion reinsurance at a cost of roughly $120 million. Actual policy count at this time is 106,120 which is going to result in additional reinsurance costs.
The 63.1% rate increase is necessary to pay for the increased cost of reinsurance needed to cover the dramatic increase in policy count and total insured values.
?
Proposed 63.1% Residential Rate Increase
Plan Rate Change 8-29-22 In-Force Policies
FAIR 62.9% 100,000
Coastal 65.6% 5,000
?
FAIR Plan Rate Increases by Line of Business
Homeowners 64.3%
Dwelling 58.4%
Renters/Condo 14.1%
Mobile Home 16.9%
Wind Only 74.1%
?
Coastal Plan Rate Increases by Line of Business
Homeowners 54.3%
Dwelling 66.7%
Renters/Condo 54.3%
Mobile Home 69.5%
Wind Only 66.2%
The board approved an overall average residential property insurance rate increase of 63.1% on new and renewal business effective January 1, 2023.
LA Citizens rates are statutorily set at 10% above the highest market rate in each parish or the actuarial rate, whichever is higher. Historically, residential rates have been primarily driven by market rates. However, this rate increase is driven by actuarial rates needed to pay for the dramatically increased cost of reinsurance.
In 2021, LA Citizens had approximately 37,000 policies with TIV of $7 billion. LA Citizens bought $55 million reinsurance at a cost of roughly $32 million.
For 2022, LA Citizens estimated that they would have 80,000 policies with TIV of $27 billion during storm season. LA Citizens bought $1.2 billion reinsurance at a cost of roughly $120 million. Actual policy count at this time is 106,120 which is going to result in additional reinsurance costs.
The 63.1% rate increase is necessary to pay for the increased cost of reinsurance needed to cover the dramatic increase in policy count and total insured values.
?
Proposed 63.1% Residential Rate Increase
Plan Rate Change 8-29-22 In-Force Policies
FAIR 62.9% 100,000
Coastal 65.6% 5,000
?
FAIR Plan Rate Increases by Line of Business
Homeowners 64.3%
Dwelling 58.4%
Renters/Condo 14.1%
Mobile Home 16.9%
Wind Only 74.1%
?
Coastal Plan Rate Increases by Line of Business
Homeowners 54.3%
Dwelling 66.7%
Renters/Condo 54.3%
Mobile Home 69.5%
Wind Only 66.2%
This post was edited on 9/13/22 at 3:22 pm
Posted on 9/13/22 at 3:21 pm to Jack Bauers HnK
quote:
all they have to do is undercut these established companies?
quote:
enterprising new insurance company
New company cheaping out on premium in highly volatile hurricane zone... What on earth could go wrong?
This post was edited on 9/13/22 at 3:22 pm
Posted on 9/13/22 at 3:21 pm to Chad504boy
quote:
the population is funding the government.
Isn't that how all government is funded?
Posted on 9/13/22 at 3:23 pm to MRTigerFan
quote:
Isn't that how all government is funded?
pretty sure most government just goes to the paper printer machine.
Posted on 9/13/22 at 3:25 pm to Chad504boy
quote:
this is more like the population is funding the government.
No
A minority of the population is having their wealth redistributed to a majority of the population
With the threat of force of the government in control
Posted on 9/13/22 at 3:26 pm to BowDownToLSU
In the event of a disastrous storm the wait to get money from La Citizens will be YEARS. If I am ever forced to default to them for coverage, that is the day we leave La for good.
Posted on 9/13/22 at 3:28 pm to BowDownToLSU
This along with rising interest rates will crush home values in Louisiana south of I-12. New Orleans is super fricked.
Posted on 9/13/22 at 3:29 pm to TDsngumbo
quote:
We all hate living here but this is home to those of us with older parents and young children. My in-laws only have us and they’re old so we’re not going to leave them. By the time they pass away, my own parents will be old and will need u
When does it stop? When you’re kids grow up and want to move away, you will be old and need them.
Maybe our parents are being selfish making us all stay is this hellhole. Just move already.
Posted on 9/13/22 at 3:29 pm to Chad504boy
quote:Something sounds off there.
In 2021, LA Citizens had approximately 37,000 policies with TIV of $7 billion. LA Citizens bought $55 million reinsurance at a cost of roughly $32 million.
For 2022, LA Citizens estimated that they would have 80,000 policies with TIV of $27 billion during storm season. LA Citizens bought $1.2 billion reinsurance at a cost of roughly $120 million. Actual policy count at this time is 106,120 which is going to result in additional reinsurance costs.
So they bought $55 million of reinsurance for $32 million in 2021. Then bought $1.2 billion of reinsurance for $120 million a year later? Reinsurance being 60 cents on the dollar in 2021 but only 10 cents on the dollar in 2022? Seems like reinsurance would be more expensive in 2022 than 2021.
Was the $55 million for 2021 missing a zero and supposed to be $550 million?
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