December Theatre
December 18, 2006Catherine Mary Chauvin
December 20, 2006ASSOCIATED PRESS
Louisiana Citizens Property Insurance Corp. has increased its proposed rate hike for commercial property insurance by about 11 percent statewide, after finding errors in its calculations.
Citizens, the state-run property insurer, aims to increase rates by an average of 138.4 percent, up from its original proposal of 129.6 percent. The firm’s homeowners rate increase of 31.7 percent is unchanged, according to a new agenda for the Louisiana Insurance Rating Commission’s next meeting.
The increases had been set for consideration in November, but the rating commission needed more time for its chief actuary to review the filing. The panel is set to review the filings on Friday, after a hearing on Allstate’s business practices.
Citizens’ proposed commercial hikes come after the St. Paul Travelers Cos. Inc., the state’s largest commercial insurance provider, said it would not renew commercial property insurance coverage in and around New Orleans, Lafayette and Lake Charles next year because officials believe firm has too much exposure in south Louisiana.
If Travelers follows through with its plan, other commercial property coverage could become scarcer and pricier, sending more companies to Citizens.
The rising demand is new for Citizens, which previously didn’t get much call for commercial policies. The company opened the year with about 985 policies and now has about 1,230 policies.
A 138.4 percent rate hike turn out to be a bargain, compared with the rest of the commercial insurance market. Insurance brokers and business groups such as Greater New Orleans Inc. say policies’ prices are rising by several hundred percent in the New Orleans area.
Even with the increase, Citizens commercial rates will remain a relative bargain, said Terry Lisotta, Citizens’ secretary. Lisotta said more business owners will probably seek policies with Citizens.
Lisotta said he estimated the number of Citizens commercial policies could quadruple.
