Rate Increase Approved by Louisiana Department of Insurance for Citizens Last-Resort Insurer

The Louisiana Department of Insurance (LDI) announced on October 10, 2022, that it had accepted Louisiana Citizens' request for a 63% rate increase on its residential property insurance coverage starting January 1, 2023. Citizens' current policyholders will not be affected by the rate rise until they renew their policy after that date.

Citizens is the state's last-resort insurer. Citizens' rate in each parish must be at least 10% more than the highest qualified market rate or 10% higher than the actuarial rate, whichever is higher, according to Louisiana law.

The rate hike is nearly entirely due to the higher cost of reinsurance for Citizens' greater number of policies this hurricane season. The Insure Louisiana Incentive Program, which is awaiting money from the legislature, is the best method to minimize the impact of this and future Citizens rate increases.

“There’s no sugarcoating it — this increase is extremely painful but required by law to make sure Citizens can handle a potential future disaster for its many policyholders,” said Commissioner Jim Donelon. “My staff and I are working with the legislature to attract more insurers to the state through the use of a program that was highly effective following hurricanes Katrina and Rita, which will give Citizens policyholders, and all Louisianans, more and cheaper insurance options in the private market.”

The Louisiana Department of Insurance indicated that policyholders with Citizens should be mindful of the following:

• The rate increase will not affect your policy until renewal. For example, if you get a Citizens policy on November 1, 2022, your premium will be unaffected through October 31, 2023.
• Citizens policyholders should contact multiple independent insurance agents at least monthly to request quotes from private insurers.
• The LDI expects the number of insurers writing policies to increase in the coming months. Citizens will refund your unearned premium if you find a policy with another insurer before the end of your Citizens policy term.