Insurance assessments sitting unclaimed

More than $275 million in special property insurance assessments have not been reclaimed, and Louisiana policyholders will lose that money if they don’t act before the year is over.

The assessments were imposed on private polices over the past four years to help keep Louisiana Citizens Property Insurance Corp. solvent. Citizens is the state’s property insurer of last resort.

Insurance Commissioner Jim Donelon said his office has sent out more than 4,500 packets and held a media campaign telling policyholders how to get back some of their money, but the unclaimed total has remained around 58 percent for months.

“It amazes me how so many people are hearing about it for the first time,” Donelon said.

Since the special assessments were placed on all property insurance policies in 2006, Citizens has collected $474.4 million.

The Legislature first let taxpayers claim the assessment as a credit on their state income taxes. Then they decided policyholders who paid the assessment could file a claim form to get a rebate – with proof of payment and the correct state tax form.

As of Aug. 20, $198.8 million has been claimed through the Department of Revenue and $275.6 million is still unclaimed. Figures from 2010 are not available.

Donelon said that if policyholders don’t act by Dec. 31, $140.3 million is “going away” because of a four-year deadline to reclaim the 2006 assessment.

The assessments were imposed on all property insurance companies in the state after hurricanes Katrina and Rita to help Citizens pay off $1 billion borrowed to pay claims. In turn, the companies passed the assessments on to their customers.

In 2006, the assessment was 10 percent of a property insurance policy’s value. Assessment rates were 3.6 percent in 2007 and 5 percent in 2008 and 2009. This year’s assessment is 4.3 percent. In 2011, it is expected to be 4 percent, said outgoing Citizens CEO John Wortman.

Each year’s assessment has a four-year window for reimbursement.