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:
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.
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.