Insurance Commissioner Jim Donelon says legislative approval of a 45-million dollar incentive fund to attract more insurance companies will provide relief sooner than later for residents struggling with soaring premiums for property coverage. Donelon says the goal is to reduce the number of policyholders who have Citizens Insurance with a private insurer.
“Hopefully 40,000 policies going out of the book of business in Citizens in the next 12 months as happened 15 years ago with the first incentive program,” said Donelon.
The first incentive program was established after Hurricanes Katrina and Rita. Donelon estimates there are between 75,000 to 80,000 “attractive” Citizens policies that could find private insurers once they received their incentives and that could happen by the end of March.
Most of the state’s Citizens’ policies are located in the coastal zone, but Donelon expects the incentive fund will attract as many as ten companies who will write policies south of I-10, and that will also provide homeowners in central and north Louisiana with more options for coverage.
“So I think as companies write policies out of Citizens, they are going to want to write an equal number of policies to counterbalance that coastal exposure,” said Donelon.
Donelon says in the regular session he’ll urge legislators to get behind a plan to provide grant money to homeowners who want to fortify their homes against 100 mile per hour plus hurricane winds.
“It is a very effective program proven in Alabama and helping consumers be able to get affordable coverage for their homes and for their businesses,” said Donelon.
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