Insurance commissioner offers tips for sh opping insurance

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Los Angeles Louisiana Insurance Commissioner Jim Donelon led a statewide Storm Tour to provide advice on insurance-related matters after almost 100,000 policyholders lost insurance coverage this summer amid a forecasted above-average 2022 Atlantic Hurricane Season.

Donelon advises homeowners to consider price, solvency rating, and guaranty fund protection when searching for policies.

Donelon asserts that Louisiana's state market of last resort, Louisiana Citizens, is open to submissions from all businesses and agents.

"Be aware that Citizens is required by law to price its rates each year higher than the rates selected by the private companies in your area in order to prevent it from becoming a market of choice. It is virtually always the most expensive coverage available, according to Donelon.

A homeowner will have a better understanding of the options available if they shop for insurance coverage by speaking with several brokers. Independent agents work with numerous insurance firms and can offer coverage from multiple providers, in contrast to captive agents, who work exclusively for one carrier and are employed by companies like State Farm and Farm Bureau.

Every insurance provider in Louisiana, according to Donelon, has a solvency rating from either A.M. Best or Demotech, which can shed light on the firm's dependability and financial soundness.

According to Donelon, it's equally crucial to find out if the business has been accepted into the Louisiana Insurance Guaranty Association, which acts as a safety net in the event that it goes bankrupt. Surplus lines firms write about 10% of residential policies, which are riskier for the property owner because they don't provide this extra layer of security.

Three insurance businesses recently went out of business: Lighthouse Excalibur, Maison, and Southern Fidelity. This week, Donelon announced that the policies from Lighthouse Excalibur, Maison, and Southern Fidelity would be cancelled on June 30 and July 15, respectively.

If an agent binds a new policy with Citizens within 60 days, affected policyholders may be covered by Citizens, the market of last resort, for any claims occurring from June 30 through August 28 for Lighthouse Excalibur, Maison, and Lighthouse Excalibur, or from July 15 through September 13 for Southern Fidelity. Policyholders who purchase a new policy with a firm other than Citizens are unaffected by the extension of coverage.

Another factor to take into account while buying insurance is deductibles. Donelon claims that in Louisiana, one-third of policies have a hurricane or named storm deductible of 5%, which equates to a $10,000 deductible on a property with a $200,000 insurance policy. Policyholders may choose a greater premium in order to lower the deductible.

"You should self-insure to the extent that you can afford to do so. The more deductible you can afford, the lower your premium will be, according to Donelon.

Donelon strongly advises going through your house and taking pictures of the contents of each room before leaving for a storm in order to speed up the insurance claims procedure in the case of a loss from fire, wind, or flood. Having a copy of your policy on hand and starting the claims process is also beneficial if you are evacuating.

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