Louisiana Citizens Property Insurance Corp. will not lower the new rates for its wind-and-hail-only policies as previously considered, which means about 35,000 customers for that product can expect to see rates jump an average of 58 percent statewide June 1.
The state-backed insurer began offering the coverage after hurricanes Katrina and Rita, when some private insurance companies stopped selling coverage for hurricane damage in some coastal areas. But Citizens had a hard time figuring out how much to charge for the wind-only coverage because no private insurers offered it. Citizens has said it ended up selling the coverage too cheaply. Property owners could buy wind coverage from Citizens and separately get private insurance for fire, burglary and other risks for less than a private policy that covered everything.
Citizens is required by state law to charge more than private insurers, with few exceptions.
Citizens does not have any wind-only customers in East Baton Rouge Parish. Full coverage policies will rise by 2.3 percent, Citizens said. In Ascension, wind-only customers will see wind-only rates increase by 154 percent, but rates for full-coverage policies will rise by 6.2 percent. In Livingston, the wind-only rates will increase by 161.9 percent, but rates for full coverage will drop by 7.8 percent.
Citizens CEO Richard Robertson said the company took “a second, third, fourth and fifth look” at the rate filing after an earlier review turned up costs that at first glance appeared incorrect in some areas.
But after running the numbers again and having the Louisiana Department of Insurance recheck, Citizens is moving forward with the filing that the department approved in March, Robertson said.
Last week, Citizens Chief Financial Officer Steven Cottrell said the staff might recommend a new filing that included lower rates for wind coverage. The wind-only rates were part of an overall filing that raised Citizens’ rates an average of 10.8 percent statewide. However, it would have been difficult for Citizens to complete the process of putting together a whole new filing, having the Insurance Department review and approve it, and then implementing the rates by hurricane season, which begins June 1.
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