Hurricane Ian likely to affect Louisiana homeowner's insurance rates
BATON ROUGE - The state insurance commissioner says you can expect your homeowners insurance rate to increase, but by how much depends on the cost of Hurricane Ian damages in Florida.
"If it turns out to be as estimated right now, between $25 and 40 billion in insured losses, that would be a huge hit to the international reinsurance market place," Jim Donelon said.
Insurance agent Stephen Lovecchio says inflation of building materials is already causing an increase. He agrees next year's premiums will be higher than this year.
"There's only a finite amount of money for hurricane risk in the Gulf Coast region of North America, and I think Ian just took it all," he said.
There are only a handful of big, reinsurance companies worldwide. They cover natural disasters across the planet and they only have so much money reserved.
The companies we deal with here in Louisiana all buy their insurance from those global companies, and the cost of reinsurance is going up.
"They'll play the claim but they need to get their money back quick because they're waiting for the next one," Lovecchio said.
Lovecchio says Louisiana needs to incentivize private insurance companies to sell here. In the free market, competition drives down prices.
Also, all the lawsuits in Louisiana and Florida cost insurance companies money and tie up claims for years,
"We now have the highest property rates in the nation and we're not a rich state. A large percentage of peoples incomes go to pay for insurance to live in southeast Louisiana."
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