Homeowners Insurance in Louisiana

Located in the Southeastern part of the United States, Louisiana is home to the Mardi Gras festival, the bayou, and a rich Cajun culture. Residents also know Louisiana is prone to tornados, hurricanes, earthquakes, and landslides. Since a large portion of the state is on the coast, it can also experience floods. Since 1953, Louisiana has had 79 federally declared natural disasters, and the rate of disasters per 1 million people is 17.33.

Along with many claims for weather-related damage, Louisiana property owners also file claims for theft, vandalism, liability, medical payments, fallen trees, snow, ice, and hail damage.

There is no federal or state requirement for homeowners insurance. However, insurance experts agree that anyone who owns property should have coverage to protect themselves. Anyone who takes out a mortgage will need coverage because lenders require it for the entire life of the loan. Mortgage lenders also dictate the coverage you need.

The national average for homeowners insurance is $2,511 per year or $209 monthly. In Louisiana, homeowners pay an average of $6,479 and, in some areas, even more due to frequent storms and weather events that cause damage. Clearly, Louisiana home insurance is expensive.

Each state offers various types of coverage based on the weather conditions and other dangers. The pool of potential insurance providers in Louisiana is slimming due to increased losses, but those that remain offer the following types of home insurance coverage:

Louisiana's coastal areas are also at risk of flooding, so consider a special flood policy and umbrella coverage to fill in any gaps.

FEMA (Federal Emergency Management Agency) manages the National Flood Insurance Program (NFIP) through a network of 50 providers across the U.S.

Since most homeowners insurance does not cover floods, this supplemental coverage can repair damage and replace items after a flood. Depending on your options, it can cover the building and/or your personal belongings. This program is available to homeowners, renters, and businesses. Learn more about the program on FEMA's website.

Climate change is causing increasingly severe weather across the U.S. Some places are hit harder than others, Louisiana being one of them. More storms cause claims, leading to losses in the home insurance industry. For the past five years, home insurance rates have spiked by 34% and, in some riskier areas, as much as 60%. From 2018 to 2023, Louisiana rates have increased by 24.9%.

Louisiana experiences frequent violent events like tornadoes, hurricanes, and wildfires. In 2023, 38 tornadoes caused millions of dollars in damage. In 2022, 1,259 wildfires destroyed 24,475 acres of land. From 1980 to 2023, Louisiana experienced 101 billion-dollar disasters, making it an incredibly risky state for insurers. In 2021, Louisiana had 2,372 lightning claims, costing insurers $28,000,000. Even one fire claim costs insurance providers $77,340. Wind and hail damage costs insurers $11,695 per incident. From 2015 to 2019, Louisiana insurance carriers lost $624,820,000 in claims.

There is no doubt that home insurance prices are rising, and property owners need relief. Some of the things that factor into the cost of home insurance are:

Some ways to save money on your home insurance rates include:

• Fortify Your Home: In places like Louisiana, where there is crazy weather, installing storm shutters, a strong roof, hurricane straps, and shatterproof windows may result in your insurance provider discounting your rates.
• Shop Around for Providers: Every provider offers different options and rates. Ask friends and colleagues for recommendations. Get multiple quotes before deciding.
• Raise Your Deductible: Raise your deductible as high as affordable to lower your rates.
• Bundle Policies: Buy your home in Louisiana and auto policies from the same provider, and they usually discount your rates.
• Install Home Security: Install a home security system or safety features to make your home safer and reduce your home insurance costs.
• Improve Your Credit: Improve your credit and boost your score, then ask your provider to revisit your rates based on your new higher score.
• Reduce Your Risk: Remove risks from your home that increase your rates.

Home insurance protects your home and belongings against covered perils. If your house burns down, your insurance company will pay to rebuild your home and replace your belongings after the fire. Most policies also include liability and medical payments coverage, other structures, and ALE insurance. After a qualifying event, you must pay the deductible before your insurance company will pay for repair or replacement.

You can apply for home insurance in a few ways. Go online and use calculators to determine how much coverage you need and the cost. You can apply through insurance company websites, speak with a salesperson, or visit a local agent. You must pay the first year upfront once you decide on the provider and coverage. Then, you can pay annually or monthly through your mortgage escrow payments.

Some of the most common home insurance discounts offered by providers include:

• Bundling Discount: Bundle multiple policies together with the same carrier for a discount.
• Senior Discount: Most providers offer seniors a discount on their home insurance.
• Military Discount: Military members are eligible for homeowners insurance discounts.
• Veteran Discount: Vets also get discounted rates on home insurance.
• Loyalty Discount: When you stay with the same company for many years, they often discount your rates as a thank you.
• Paperless Discount: Sign up for paperless statements and receive a home insurance discount.
• Auto-Pay Discount: Most providers offer a small discount for auto payments.
• Claims-Free Discount: Stay claims-free for as long as you can, and you should pay less than someone with claims.
• Early Quote Discount: Get quotes in advance and earn a discount on your insurance.
• Fire-Safety Discount: Install fire safety features like sprinklers, fire extinguishers, and smoke alarms to earn a discount on your home insurance.
• Security/Smart-Home Discount: Install a security system or smart home devices that monitor for issues and earn a discount on your insurance.
• New Home Discount: New construction homes earn discounts of up to 40% off.
• Non-smoker Discount: Non-smokers pay less on home insurance than smokers due to reduced fire risk.
• Location-based Discount: Some locations earn discounts for being low-risk and safer.

Common Rates Offer by Homeowners Insurance Firms

New homes cost less to rebuild and insure. The average cost for a new construction home in Louisiana is $3,477. However, that price varies widely due to the area of the state, your credit score, marital status, claims history, and other factors. The least expensive provider in Louisiana is State Farm.

Top 10 Home Insurance Firms in Louisiana and Average New Home Savings

Remodeling your home can refresh it and give it a massive facelift, increasing its value and comfort. However, those upgrades can also impact your home insurance rates. Some renovations increase rates by adding risk or value, and others decrease them by making the home safer. Some upgrades actually cancel each other out.

Home Renovations that Increase Rates

Some home renovations that increase your rates include:

• Building an Addition: Building an addition increases your space and may raise your insurance rates. The larger the home, the more it costs to rebuild.
• Luxury Appliances & Fixtures: If you install luxury appliances and fixtures (fancy gold faucets, etc.), your home will cost more to rebuild, and therefore, your rates will go up.
• Solar Panels: Solar panels can save you thousands on your electric bill, but they are expensive to replace and may also increase your insurance premiums.

Home Renovations that Decrease Rates

Some home renovations that decrease your rates include:

• Smart Home Features: Install smart home devices that automatically monitor your home for fire, water leaks, theft, and other issues. Some also alert emergency services to save your home from disaster. You may save on your insurance if you install systems like these.
• Replace Your Roof: Replacing your roof with a much stronger one that can better withstand storms will help you save on your insurance.
• Water Shut-Off Devices: Position water shut-off devices and alarms around the house to avoid any leaks and water damage. Your insurer should discount your rates for being proactive and helping to minimize claims.

Depending on the materials used, replacing your siding may increase or decrease your rates.

Home insurance covers you for injuries incurred during renovations and theft but does not cover the upgrades themselves. Home insurance only pays to repair or replace your home after a qualifying disaster.

Before embarking on any renovation, you should speak with your insurance agent to determine how it will impact your coverage levels and rates. They can come out after the work and perform a walk-through to re-evaluate and adjust from there.

People who live in rented homes such as condos, apartments, and houses also need homeowners insurance. However, it's called renters insurance, and it works a bit differently. With renters insurance, you do not get any dwelling/structural coverage. That must be covered under the owner's policy. The primary purpose of renters insurance is to protect your personal belongings. Most policies also include liability, medical payments, and loss of use coverage. If your personal property gets destroyed or stolen, your policy will pay to replace it. If you file any claims, they will be subject to your deductible and any coverage limits.

Three things factor into the price of renters insurance:

Louisiana's average renters insurance rate is $433 per year, or $36 per month, which is much higher than the national average of $143 per year or $12 a month.

Condo owners also need homeowners insurance. Condo insurance, or HO-6 insurance, is slightly different from regular homeowners insurance. The most significant difference is the dwelling coverage. Each condo association has its own master policy that covers the structure of each building. In the event of a fire or other covered event, the master policy will pay to replace the building and restore it back to its original (when it was first built) condition. The problem is that it could have been years, and most owners will have already updated the condo with modern appliances, fixtures, and flooring. The HO-6 policy picks up where the master policy leaves off and pays to restore the interior of the condo back to its most recent condition.

The dwelling coverage also sets condo insurance apart from renters insurance, which has none. With condo liability insurance, the person must be injured inside the condo, not on common grounds for the insurer to pay.

Typical condo insurance includes dwelling coverage (inside only), personal property, liability, medical payments, loss of use, and loss assessment coverage for events like fire, windstorms, and theft. Some of the items that condo insurance will replace are:

• Furniture
• Appliances
• Flooring
• Cabinets
• Countertops
• Interior Walls
• Plumbing
• Wiring
• Light Fixtures
• Personal Belongings

The average rate for condo insurance in Louisiana is $705 per year and may be higher or lower depending on your location in the state. Condo insurance in Louisiana is priced higher than the national average of $455.

Some tips for saving money on condo insurance in Louisiana include:

• Increase Your Deductible
• Ask About Discounts
• Make Your Home More Secure
• Bundle Your Policies
• Improve Your Credit
• Lower Your Risk

The Louisiana home insurance market is in crisis, and at least nine insurers have gone out of business since 2022 due to high claims and losses. In 2020, home insurance providers within the state were less profitable than in any other state due to multiple devastating hurricanes. As a result, the state has set up a high-risk insurance pool for people who cannot find coverage. Enrollment is growing fast in a state riddled with violent weather.

Louisiana property has suffered enormous damage due to hurricanes, tornadoes, and wildfires. The damage led to claims and massive losses for insurance firms in the state. Many have stopped offering coverage there altogether, and others have suffered increased losses. Soon, it will be difficult for Louisiana residents to find affordable coverage.

Regulating insurance providers is the responsibility of state agencies. These offices monitor providers and rates, investigate customer complaints, and punish firms that violate ethics or laws. Their goal is to ensure every provider treats customers fairly and legally. In Louisiana, this agency is the Department of Insurance, located at 950 North Fifth Street, Baton Rouge, LA 70804.