La. Citizens increasing insurance premiums

The board of the Louisiana Citizens Property Insurance has given final approval to a 22.1% rate increase for its 5,734 commercial policyholders, a move that could mean an increase of about $700 in the average policy premium. Citizens Chief Financial Officer Steve Cottrell says the increase will generate about $4 million in income for the company in the next year. Cottrell says the average business policy is now about $3,400 annually. The new rates will take effect statewide Feb. 1 for new and renewing policies. Cottrell says Citizens policy premiums by law must be 10% higher than the most expensive private insurance in an area. This year’s Citizens commercial policy premiums increased an average of 2.14%. The board also voted to increase the rates on Citizens homeowner policies an average of 8.3% for families living in 12 south Louisiana coastal parishes—Calcasieu, Cameron, Iberia, Jefferson, Lafourche, Orleans, Plaquemines, St. Bernard, St. Mary, St. Tammany, Terrebonne and Vermilion—hit hard by hurricanes Katrina and Rita in 2005. The new residential rates will go into effect Jan. 1. The new rates will mean between $12 million and $13 million more in revenue for the state’s insurer of last resort. The plan had the approval of Insurance Commissioner Jim Donelon, whose office reviews all rate change requests.