Louisiana insurer rolls out rate reductions

The state-run Citizens Property Insurance Corp. submitted new, lower rates for homeowners that could drop prices by 6.3%

Insurance News

By Lyle Adriano

The board of directors of Louisiana Citizens Property Insurance Corp. voted last Jan. 7 to submit new rates to the Louisiana Insurance Department. If approved, most policyholders in the Orleans Parish could enjoy lower rates by June 30.

Homeowners in Orleans Parish could see their rates fall by 6.3%, on average. Those who live in coastal regions will have the rates cut by 5.6%.

Other area parishes are being considered for similar rate cuts, while some could be affected by increases instead.

Citizens chief financial officer Steve Cottrell pointed out that the reduction in the cost of reinsurance was largely responsible for the state-run insurer’s decision to consider lowering rates. Without the reduction, Cottrell reasoned, the rates would be flat.

Cottrell said that Citizens’ cost of reinsurance is expected to fall by 3 to 5% this year. The insurer is looking to reduce around $5 million from its reinsurance costs.
Most of Citizens’ customers in Louisiana are located in Orleans and Jefferson parishes.

Unlike the rates in Orleans, which are being considered for reduction, Jefferson Parish’s rates will increase by an average of 4.4%. The parish’s coastal areas will see rate reductions, however, by 6.4%.
 

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