Almost all of the Orleans Parish homeowners who buy coverage from the state insurer of last resort could see their rates drop 6.3 percent if the Louisiana Insurance Department approves proposed rate reductions.
The Advocate reports a mix of rate cuts and increases affect other area parishes.
Louisiana Citizens Property Insurance Corp.’s board of directors voted on Jan. 14 to submit the new rates to the department. Citizens expects the new rates to go into effect June 30.
“The biggest driver is the reduction in the cost of reinsurance,” said Steve Cottrell, Citizens chief financial officer. “If you take that out, the rates would be flat.”
Citizens’ cost of reinsurance, the insurance that insurers buy to protect themselves against excessive claims, is expected to fall 3 percent to 5 percent in 2016, he said. Citizens expects to trim about $5 million from its reinsurance costs.
Citizens’ average homeowner premium is $1,680. The rates vary by area. Homes in coastal areas are typically more expensive to insure because they are at the greatest risk of storm damage.
The bulk of Citizens’ homeowners policies lie in Orleans and Jefferson parishes.
Most of Citizens’ Jefferson Parish customers will see their homeowners rates increase an average of 4.4 percent. However, those in the coastal areas of the parish will see rates drop by 6.4 percent. Homeowners in coastal Orleans will see rates drop 5.6 percent.
Other rate changes by parish include a 2.9 percent increase in St. Tammany; a 4.6 percent cut in East Baton Rouge; a 5.2 percent increase in Ascension; a 15.8 percent increase in Livingston; a 1.2 percent cut in Lafayette; a 4.2 percent increase in Iberia; a 5 percent increase for most of Lafourche, with a 5.4 percent increase along the coast; and a 7.1 percent increase for most of Terrebonne, with a 17.8 percent increase along the coast.