Rate Changes in Store for Louisiana Citizens Commercial Insurance Customers

Premiums for almost all of Louisiana Citizens Property Insurance Corp.’s commercial customers will increase an average of 2.3 percent beginning in February, under a proposed rate filing.

But the 307 customers whose properties lie below the Gulf Intracoastal Waterway will see rates drop by 17.5 percent. Citizens Chief Financial Officer Steve Cottrell says the average policyholder there will see annual rates drop to $4,764, a savings of $1,011.

Cottrell said the main reason for the rate change is that the cost of reinsurance, the insurance that insurers buy to protect themselves from excessive claims, has fallen.

Four parishes account for almost all of the policies below the Intracoastal: Lafourche, Plaquemines, Terrebonne and Jefferson. Citizens cut commercial rates in those areas an average of 23.8 percent for 2014.

Citizens has 4,023 commercial policies above the Gulf Intracoastal Waterway. Roughly half of those properties lie in Orleans and Jefferson parishes, according to the rate filing. The average premium above the Intracoastal will increase 2.3 percent, or $109, to $4,846.

Taking into account those receiving increases and those with decreases, overall commercial premiums will be reduced by 0.2 percent, Cottrell said. It’s the second year in a row that Citizens has reduced overall commercial rates.

Citizens’ board of directors voted on Sept. 11 to approve the rate filing.

Citizens is the state’s property insurer of last resort and covers properties private insurance companies will not. In most cases, state law requires Citizens to charge more than private insurers.