New Orleans residents whose homes are insured by Citizens Property Insurance could see premium increases as high as 16.7 percent in the coming weeks, just as lawmakers are preparing to convene for their annual session. In response, one lawmaker is considering a bill that would require an additional layer of approval for Citizens to increase rates for wind and hail coverage.
Citizens, the state's insurer of last resort, came under fire from coastal lawmakers last year when it hiked premiums in south Louisiana by double and triple digits. The state requires Citizens to charge at least 10 percent more than the actuarial rate, or whatever private companies are writing for the same policies.
State Sen. Bret Allain, R-Franklin, said residents near the coast realize their homes come with the added risks of natural disasters, but he noted that "they already pay their fair share of that risk" without the increases. Allain said his legislation, which is still being drafted, could force Citizens to seek approval of the House and Senate insurance committees for any parishwide increase exceeding 25 percent.
While the higher rates will likely give coastal residents a case of sticker shock, lawmakers passed legislation last year — with backing from Gov. Bobby Jindal — granting property insurance holders a two-year, 10 percent break on their premiums, including the recent increases. (A similar break for coastal parishes was on the books for the five years following Hurricanes Katrina and Rita in 2005.) That waiver, which will expire in 2015, applies to Orleans and 11 other parishes.
The regular session convenes April 8 in Baton Rouge. — Jeremy Alford