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Louisiana homeowners should expect rate increases after active hurricane season

3 weeks 4 days 9 hours ago Friday, October 30 2020 Oct 30, 2020 October 30, 2020 7:56 PM October 30, 2020 in News
Source: WBRZ

BATON ROUGE - November 30, the final day of hurricane season can't come soon enough for Louisianians after a record five named storms have hit the state this year.

But even after hurricane season ends, homeowners will still feel its effects when it comes to their insurance policies.

"They should expect, on average, a 5 to 10% rate increase over the next year to 18 months," Insurance Commissioner Jim Donelon said.

Donelon says these anticipated rate hikes come after years of 1% increases annually.

"Our ability to attract these small regional carriers...has given us so much competition that rates have been flat for the past several years in the homeowners market statewide, in Louisiana," Donelon said.

Donelon says the increases expected from this hurricane season are somewhat like deja vu back to 2004 and 2005. This time around though, the increases won't be anywhere near where they were then following Hurricane Katrina.

"Katrina for insured losses is still the all-time record-setting event in the history of insurance anywhere in the world," Donelon said. "We in Louisiana collected $24.3 billion for wind losses, hurricane losses, not counting flood."

Hurricane Laura, which hit southwest Louisiana in August will now rank second behind Hurricane Katrina with an estimated $10 billion in paid losses from more than 150,000 estimated claims. Hurricane Delta, which hit the same area weeks later, is estimated to have caused losses totaling $1 billion.

Whether you received damage from any of the five named storms: Tropical Storm Cristobal in June, Tropical Storm Marco in August, Laura, Delta, or most recently Hurricane Zeta this week, Donelon say the expected 5 to 10% rate increases shouldn't stop homeowners from filing a claim.

"The fact that you had a claim for an 'act of God loss' will not affect your rates on an individual basis at all," Donelon said. "We all will experience the increase."

Louisiana isn't alone in expecting increases, Donelon says, and unless 2021 sees a repeat of the active 2020 season, those rates should start to go down.

"That cost is not unlike what will happen in North Carolina, and Georgia, and Florida, and Texas, all coastal states," Donelon said. " I would think that we would see the cost of this year, and last year, flatten out by the end of next year."

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