BOBBY ARDOIN
Editor/Consulting Writer
Louisiana property and homeowners should expect insurance policy rate increases of at least five to 15 percent during the next two to three years, a local insurance agent told members of the Opelousas Noon Rotary Club on Tuesday.
Inflationary costs for building material replacement have risen by as much as 20 percent since 2020, which has helped cripple insurers who are responding to claims from storm damages, said commercial agent Brian Harmon.
Harmon, who has worked for Dupre, Carriere and Godchaux for the past three years, said that Louisiana now ranks among the top 10 states for insurance premium costs.
While those escalating rates are expected to continue in Louisiana, Harmon told the Rotarians that home and property owners in California are seeing 50 to 75 percent increases in their annual rates.
Over the past four years, Harmon said that about 30 insurance carriers have chosen to leave Louisiana and do business elsewhere.
Those departures mean that since then, about one-fifth of the state’s insurance market has had to be replaced, Harmon added.
For those in Louisiana who live south of Interstate 10, the cost of insurance is normally going to be more, said Harmon.
“No one wants to write new property insurance and the further south you go, the truer that is,” Harmon said.
Harmon added that recently the state has attempted to lure more companies into writing more policies in Louisiana by providing prospective companies with cash incentives.
The cash incentive plan has been adopted especially for attracting companies that are willing to issue policies in the geographical areas of Louisiana which are located south of I-10 or considered to be high risk, Harmon said.
Data which could be used to track the efficacy of that strategy isn’t available at this point due to the recent implementation of that plan, Harmon said.
“(The state) hasn’t found a decent solution other than the cash incentives,” Harmon pointed out.
Harmon said that Louisiana Citizens Property Insurance has picked up a lot of policy holders who have been unable to find a company to insure their property.
Louisiana Citizens, Harmon estimated, has written about 200,000 property insurance policies recently.
According to a published article in The Illuminator earlier this year, severe climatic incidents and four hurricanes which have passed through different areas of Louisiana over the past several years, have increased risks and caused many insurers to become insolvent, forcing them to leave the state.
While Louisiana Citizens has provided insurance for those who can’t find another company, the rates for that option are also about 10 percent more expensive, according to The Illuminator.
Harmon said the high costs for Louisiana auto insurance are causing businesses to lave the state, due to what he said has been an “unbroken chain of liability” in addition to the number of settlements that are being made out of court.
