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How Inflation Effect Insurance Rates in Louisiana

How Inflation Effect Insurance Rates in Louisiana

As I’m sure you’re aware, insurance premiums are going up throughout the nation, and it’s affecting everyone. Let's talk about why. There are a few reasons that insurance rates are going up in Louisiana; for this article, we will be focusing on inflation and natural disasters:

  1. Inflation 
  2. Natural Disasters

1. Inflation

Inflation affects every industry and insurance is no different. The higher the cost of goods, the more it would cost to rebuild (increases the replacement cost ) on your home. It's really that simple. 

The National Association of Home Builders states that the price of building materials are up 19.2% year over year and have risen 35.6% since the start of the pandemic.

Houses valued at less than $1 million saw an average insurance rate increase of 5.3% in the first quarter this year, while houses valued at more than $1 million saw a 7% increase during the period, according to a report from MarketScout.

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2. Natural Disasters

The other reason rates have increased is due to record-high claims payouts and financial losses due to costly natural disasters. 2020 & 2021 brought Laura, Delta, Zeda & Ida, which collectively cost an estimated $24 billion of damage in Louisiana. Insurance providers are having to raise rates to pay for those losses and ensure that they don't face bankruptcy. 

In Louisiana, we are definitely a high-risk area. Several companies have quit writing policies in Louisiana and many have gone insolvent. Even financially secure companies may not be willing to take the risk. With the 2022 hurricane season predicted to be especially severe, rates are likely to increase throughout the year.

So, how can you lower your insurance premium?

You may qualify for home insurance discounts if:

  • Your roof is new

  • You’ve recently replaced your HVAC or plumbing

  • You bundle multiple policies

  • You have a home security system that notifies the police department

  • You’ve been claims-free for 5+ years 

  • You pay in full 

  • You decide to increase your deductible 

While it’s always a pain to see your premium increase, it's important to remember that in a hard market like the one we're in, we need to be covered where we can.

At Kastner Insurance we want our clients to rest assured that we always shop around for the lowest rates & the best coverage possible.

If you have any questions about your coverage or insurance premium, please feel free to reach out to us by clicking below to schedule a free consultation today! 


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