A new report on the state of the insurance market in Louisiana in the 10 years since hurricanes Katrina and Rita from Commissioner of Insurance Jim Donelon shows homeowners rates rose 2.8% on average last year, marking the lowest statewide increase since the storms made landfall in 2005.
Donelon released the report today at a insurance market summit hosted by the Department of Insurance at the University of New Orleans. Also attending the summit were Mississippi Commissioner of Insurance Mike Chaney, as well as business leaders and representatives of the property and casualty insurance markets.
Today, Louisiana has 22 new insurers operating that were not here in 2005, which he attributes in part to strategies including legislative reforms, active recruitment of companies and the Citizens Property Insurance Depopulation program.
Louisiana Citizens, the property insurer of last resort, has seen its market share fall from a ten-year high of 9.8% after the storms to 1.8% today. From 2008 to 2015, Citizens moved from the third largest insurer in the state to the ninth largest, a move that Donelon says means more consumers are able to secure policies through private insurers at lower premiums.
Donelon says the private insurance market has recovered in Louisiana due to the creation of a mandatory statewide building code in 2005 and the incentives passed by the Legislature in 2007 to encourage homeowners to strengthen their properties against storms.
Insurance premium discounts offered to those who comply with the Louisiana State Uniform Construction Code can reach as high as 20% for those in coastal areas. The Legislature also passed legislation tripling the safety net of the Louisiana Insurance Guaranty Association by increasing the coverage provided homeowners from $150,000 to $500,000 per claim, allowing for consumers to be confident when purchasing coverage from a company that is not a household name, Donelon says.
“Through the efforts of so many in the public and private sectors and the resiliency of our residents, Louisiana has weathered the challenges that were left in the wake of Hurricanes Katrina and Rita,” he says in a prepared statement. “Our insurance market has come back stronger and more diverse ten years later and our consumers have more options, more competition and more reasons to expect a bright future.”