Citizens Insurance poised to hike costs dramatically in Louisiana – Daily Advertiser

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Homeowners protected by Louisiana’s safety-net insurance company could face a 63% cost increase in 2023, escalating the state’s growing property insurance crisis.
Louisiana Citizens Property Insurance Co.’s board recommended the increase Thursday, but Republican Insurance Commissioner Jim Donelon must make the final call. Donelon told the USA Today Network on Monday it will likely be about six weeks before his final decision.
Donelon has already approved a 73% cost increase on Citizens’ commercial property insurance that will take effect in November.
Citizens is considered Louisiana’s insurer of last resort, a quasi-government company created by the state to provide property coverage to those who can’t secure it in the private market. By law, Citizens’ prices must be 10% above the highest market rate in each parish or the actuarial rate, whichever is higher.
The spike in homeowners costs in general combined with significant increases in federal flood insurance rates for many Louisiana homeowners could price many out of home ownership, said one member of the Citizens board.
“Some people’s insurance payments are going to be larger than their mortgage payments,” said Eugene Montgomery, who is also president of the private Community Financial Insurance Center, which has offices in Baton Rouge and Monroe. “I’ve been in the insurance business 44 years and have never seen such a challenging market.”
Meanwhile, more homeowners are being forced to buy from Citizens after numerous private insurance company failures and a moratorium by some remaining companies on writing new policies in coastal Louisiana, which has been ravaged by hurricanes.
Citizens’ customers have more than tripled to about 106,000 during the past two years.
“That’s driven primarily by the failure of seven companies and other companies no longer writing new business mostly below I-10,” Donelon said. “In the aftermath of Hurricanes Laura and Ida companies have pulled in their horns.”
A combined 800,000 claims totaling $22 billion have been filed in the aftermath of Laura in 2020 and Ida in 2021.
Donelon said he has crafted a strategy to depopulate Citizens.
“I hope to roll that plan out sometime this week,” said Donelon, who declined to provide details of his plan.
Meanwhile, homeowners are continuing to flock to Citizens for now as their only option.
“Citizens is writing about 500 new policies a day and I’m not sure I can see a light at the end of the tunnel to slow that rate down,” Montgomery said.
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Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1 


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