Louisiana Citizens Insurance Policy Count Down 50% from All-Time High

Louisiana Insurance Commissioner Jim Donelon announced that the total policy count for Citizens Property Insurance Corp. (Citizens), the state’s insurer of last resort, has dropped by 50 percent from its all-time high in 2008.

With this eighth round of the Citizens Depopulation Program, the total policy count of the state’s insurer of last resort will drop below 88,000 personal and commercial policies, according to the Louisiana Department of Insurance.

Donelon said this reduction is predicted to drop Citizens homeowners’ market share to an estimated 1.8 percent, ranking it ninth in market share size in Louisiana. This is down from 2.3 percent at the close of 2013 and down from its 9.8 percent peak in 2008.

Citizens is required by law to have the highest rates in each parish. Donelon said policyholders that move to a private insurance may experience a rate decrease.

Over the eight rounds of the Citizens Depopulation Program, Citizens has reduced its overall policy count by 50 percent from an all-time high of 174,000 policies in 2008.

Each year during the depopulation process, companies are allowed to review Citizens’ policies and select those that they would like to pull from Citizens to write on their own paper. According to Citizens, this year five companies will receive 10,739 residential policies, dropping the policy count below 84,000 residential policies and to approximately 4,000 commercial policies.

The five companies successfully making offers to write homeowners policies written by Citizens are Access Home Insurance Co., Centauri Specialty Insurance Co., Coastal Select Insurance, Lighthouse Property Insurance Corp. and Maison Insurance Co. Coastal Select is new this year to Louisiana. The other four companies previously participated in the Citizens depopulation process.

All five companies offer similar coverage as Citizens, or better coverage, for a lower rate. In total, 35,869 unique policies were requested by these companies and 10,739 were moved.

Citizens’ policyholders whose policies were authorized to be moved to another company have 60 days to decide if they prefer to remain with Citizens. In prior rounds of depopulation less than two percent of policyholders opted to remain with Citizens. Of the 21 carrier groups that have joined the state’s homeowners insurance market following Hurricanes Katrina and Rita, 12 have participated in Citizens’ depopulation process.

In the seven previous rounds of depopulation, Citizens saw the following reductions in policy counts: round one – 26,595 policies on June 1, 2008; round two – 13,343 policies on Dec. 1, 2008; round three – 3,368 policies on April 1, 2009; round four – 13,466 policies on Dec. 1, 2010; round five – 10,890 policies on Dec. 1, 2011; round six – 6,877 policies on Dec. 1, 2012; round seven – 14,268 policies on Dec. 1, 2013; and round eight – 10,739 policies on Dec. 1, 2014.

Source: Louisiana Department of Insurance