Louisiana Homeowners Insurance Guide
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The Pelican State is nestled in the southeast of the United States, at the top of the Gulf of Mexico. Between the melting pot of cultures, incredible jazz, and colonial architecture, Louisiana has a bit of something for everyone to enjoy. It also oozes of American history with its museums and preserved farming estates. The mix of French, African and American cultures has spawned great food and festivals that have become world renown.
Unfortunately, Louisiana also has its fair share of natural disasters. The disaster that plagues the Pelican State the most is hurricanes. Year in and year out, severe storms cause a great deal of anxiety for property owners in the state. As a result, homeowners and renters insurance is virtually required if you call Louisiana home.
Louisiana property owners have some of the highest rates in the country for property insurance. In fact, the Pelican State boasts the first and third highest premiums in the country for homeowners and renters insurance, respectively. These rates are undoubtedly driven by the state’s susceptibility to catastrophic natural disasters.
Average Homeowners and Renters Insurance Premium
Source: Insurance Information Institute (2017)
The costliest hurricane to hit the U.S. was Hurricane Katrina, which touched ground in 2005. It caused over $38 billion in insured losses for the state of Louisiana. Not to mention 1,800 fatalities as well. Louisiana’s tendency to be impacted by these severe storms is nestled in the fact that its largest city, New Orleans, is along the Mississippi River and quite close to the Gulf of Mexico. Thus, property owners not only have to worry about the common perils your standard homeowners or renters insurance policy cover, such as fire, vandalism, and theft; they also have to protect their property from flood and other hurricane related losses.
The Pelican State’s track record regarding natural disasters and catastrophic loss limits the amount of competition that exists in the property insurance market. Essentially driving rates higher, making it harder for property owners to source adequate coverage.
Top 5 Home Insurance Carriers in Louisiana
|USAA Insurance Group||6.2%|
|LA Farm Bureau Mutual Insurance Co.||4.8%|
Source: Insurance Information Institute (2019)
This problem is exemplified in the distribution of market share in Louisiana’s property insurance market. The company with the most market share controls just as much of the market as the next four largest carriers in Louisiana combined. Thankfully, Louisiana created a state-run entity, Louisiana Citizens Property Insurance Corp (Louisiana Citizens), that acts as a market of last resort for those property owners that cannot find adequate property insurance in the open market. Note that property owners can also acquire flood coverage through the National Flood Insurance Program (NFIP).
Property insurance in the Pelican State is quite expensive. In fact, it has the most expensive homeowners insurance in the country. Unfortunately, this is driven by the state’s history of catastrophic loss, which is often times at the hands of a hurricane. That said, the property insurance market in Louisiana has the infrastructure in place to provide property owners with adequate coverage, it just may be at relatively high rates.
Louisiana Department of Insurance
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