Louisiana Citizens Property Insurance Corp. CEO John Wortman said the state-backed property insurer will likely seek another rate hike for next year, roughly a 10 percent statewide average increase, on top of this year’s 7 percent increase. The percentage increases are averaged throughout the state, meaning properties farther from the coast might see rate decreases and those near to the coast would see increases higher than 10 percent.
Wortman said there are several factors causing the firm to seek rate hikes, including the $330 million the firm paid out last year for claims after Hurricane Gustav. The company is also paying more for reinsurance. The state government strategy of “shrinking” Citizens is also causing rates to rise, Wortman said, because the company tends to insure homes that are the most prone to be damaged. Some 40,000 of Citizens’ 170,000 policyholders have moved to private insurers since 2007.
Wortman wants the board to keep the assessment fee imposed on all Louisiana homeowners who carry property insurance at its current 5 percent level. The board decided at its July meeting to delay the decision on the assessment, which goes to paying off the debt Citizens incurred from Hurricanes Katrina and Rita in 2005, to the following month.
Topics Louisiana Pricing Trends
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