Louisiana Citizens Property Insurance Shedding More Policies

Insurance Commissioner Jim Donelon reported that three insurance companies new to Louisiana are participating in the latest round of depopulation of Citizens Property Insurance Corp.

Citizens is the state’s property insurer of last resort. Its book of business swelled following Hurricanes Katrina and Rita in 2005 and peaked in 2008. The state has been working since that time to improve the property insurance market and entice more insurers into providing coverage there.

According to Citizens, this year seven companies will receive 13,245 residential policies, dropping the policy count below 70,000 residential policies and to approximately 3,500 commercial policies.

As the insurer of last resort, Citizens must make homeowners insurance available for all residents that are unable to get insurance from a private company. However, it is also mandated that Citizens’ policies be the most expensive policies on the market and that Citizens minimize the possibility of having to assess policyholders for its losses.

Depopulation is a process by which some policies can be absorbed by private companies at the same level of coverage with a lower cost to the policyholder while also reducing the risks of future assessments.

Donelon said the current reduction is predicted to drop Citizens homeowners market share to an estimated 1.5 percent, ranking it 12th in market share size in Louisiana. Citizens’ market share peaked at 9.8 percent in 2008. Over the eight rounds of the Citizens Depopulation Program, Citizens has reduced its overall policy count by 60 percent from an all-time high of 174,000 policies in 2008.

The seven companies successfully making offers to write homeowners policies written by Citizens are Access Home Insurance Company, Capitol Preferred Insurance Company, Coastal Select Insurance Company, Maison Insurance Company, Ocean Harbor Casualty Insurance Company, Prepared Insurance Company, and Safepoint Insurance Company. Ocean Harbor, Prepared and Safepoint are new this year to Louisiana. The other four companies previously participated in the Citizens depopulation process.

Citizens’ policyholders whose policies were authorized to be moved to another company have 60 days to decide if they prefer to remain with Citizens. In prior rounds of depopulation less than two percent of policyholders opted to remain with Citizens.

Source: Louisiana Department of Insurance

Topics Carriers Louisiana Property Homeowners