State promotes Citizens rebates

Louisiana taxpayers are leaving tens of millions of property insurance rebates unclaimed each year, Insurance Commissioner Jim Donelon said Thursday.

The reason is that nearly two-thirds of property owners are foregoing the rebates for the Louisiana Citizens Property Insurance Corp. assessment, Donelon said. At the end of 2012, more than $255 million remained unclaimed.

Property owners have a limited time to claim the rebates, Donelon said. The option to claim the rebate for the 2009 assessment expires after Dec. 31.

“Nearly $194 million has reverted back to the state general fund (since 2006), unclaimed by property owners,” he said.

Donelon spoke during a joint news conference with Revenue Department Director of Customer Service Kent LaPlace. The news conference was part of what Donelon jokingly called the Louisiana Citizens Assessment Rebate Tour, “an annual ritual” in which he crisscrosses the state to urge property owners to claim the tax rebate.

The assessment covers payments on the nearly $1 billion Citizens borrowed to pay Hurricane Katrina claims. Citizens levies the fee on property insurers, who pass it on to policyholders. Consumers can claim the refund once they pay their annual insurance bill.

Since 2006, Louisiana property owners have paid $755.3 million in Citizens assessments but have claimed only $305.9 million, or 40.5 percent, of the available rebates, according to the Insurance Department. Property owners basically have four years from the assessment to claim a rebate.

The average rebate amount for all claims paid as of Dec. 31 was $120.93, according to the Insurance Department.

The rebates for 2009 to 2012 can be claimed on property owners’ Louisiana Income Tax Return as a tax credit; by going to http://www.revenue.louisiana.gov/fileonline and clicking on “Citizens Insurance Rebate”; or by filling out Form R-540INS for individuals or Form R-620INS for businesses.

After paying the insurance premium that includes the Citizens assessment, property owners can fill out the short rebate form for each year of the assessment, Donelon said.

LaPlace said property owners can mail or fax the form in, along with the insurance declaration page for that year.

The “dec” page shows the amount of the Citizens’ assessment, Donelon said.

LaPlace said forms for all four calendar years can be found on both agencies’ websites. Go to http://www.ldi.la.gov and click on the Citizens Insurance Rebate link or http://www.revenue.louisiana.gov/Citizens

Businesses can claim the Citizens rebate by filing the Department of Revenue or by filing a current-year or amended tax return.

A copy of the insurance policy declaration page showing proof of the assessment amount must be attached to any claim form. Individual policyholders may also claim the rebate by amending a prior-year tax return.

Donelon said property owners can also call the Insurance Department’s toll-free number, [phone].

Comments

1) Comment by Mygulfbleedsforu - 22/02/2013

NewsReader: clearly the state is "compelled" to do so only because it compelled itself. For many reasons, it would be a good idea to respect nature a little more than we do in regard to building our homes and other structures. One way to do that is, as you point out, let free enterprise do (or not do) its thing.

2) Comment by NewsReader - 22/02/2013

Notauser, right. But the simpler method is either (a) require all licensed insurance companies who wish to write any commercial lines in La to take a proportional share of those in "undesirable areas" as their premium income bears to the total written premiums in this state. (b) require everyone to insure with Citizens statewide for hurricane/storm damage so as to spread the risk like an insurance company would do (eg like FL did way back with their windstorm pool). The best option imho though is to let economic and business factors decide whether something is viable or not. Considering the $100M fine Citizens ended up with for paying claims late, I think it's pretty clear La doesn't belong in the insurance industry.

3) Comment by Notauser - 22/02/2013

You guys do realize this whole thing is just a shell game don't you? The state puts the citizen's charge on you insurance bill, then gives it back to you on your income tax return. Separately, the state subsidizes Citizens. So, if they wanted to they could stop putting the citizens charge on your insurance bill and at the same time eliminate the income tax credit. You would still be subsidizing people living in uninsurable locations. The reason for the shell game is the state makes money off those who don't claim the income tax credit while the politicians get credit for trying to help voters by encouraging them to claim the income tax credit.

4) Comment by NewsReader - 22/02/2013

@Mygulfbleedsforu, precisely. But if it's not commercially viable, i.e. no insurance company is willing to insure those properties, then why is the state compelled to do so? Or why aren't those people charged a realistic premium commensurate with the risk being borne by the state? Why should others who live in safer areas be required to subsidize the premiums of those who of their own free will live somewhere with greater hazard. Particularly because as Notauser points out, if Booby gets his way, claiming this refund is out of the window. And at that point, there will be nothing you can do to stop your subsidy increasing every year.

5) Comment by Mygulfbleedsforu - 22/02/2013

@ Bighug, curious about what you mean by "they're not supposed to"? One other thing -- the people covered by this special insurance are people who cannot get coverage otherwise, rather than people who did not.

6) Comment by tball - 22/02/2013

Another crooked Comm. of Ins. acts like he's doing something for Louisiana Citizens! Why do we have to pay this anyway??

7) Comment by Grannee - 22/02/2013

How much interest is the state collecting from this?

8) Comment by Bighug - 22/02/2013

I always claim the rebate, but wonder why the state continues to collect it, when it is not supposed to. Perhaps one of the Advocate's reporters will ask that question next time a news story on the subject is printed. Why are those of us who are responsible enough to insure our homes required to pay those who didn't?

9) Comment by Notauser - 21/02/2013

I guess we will lose the rebate when the income tax is eliminated.