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Homeowner’s Insurance Premiums in Louisiana

Living in Louisiana can get expensive at times. When it comes to homeowners insurance, this is certainly no exception. As a matter of fact, Louisiana has the third-highest premiums, on average, for homeowners insurance. But you shouldn’t let this discourage you from buying your first home. Let us help you make the home insurance buying process as painless as possible with our handy guide.

Most homeowners insurance policies, especially the HO-3 policies, are very comprehensive. They cover not just the cost of  repairing damages caused to your external structure, but they also pay for repairs or replacement costs of personal property. They can also protect you from Financial liability if something happens on your property, as well as medical expenses for anyone who gets hurt. Below are suggested coverage limits for a $200,000 home in Louisiana. Currently, average home prices in Louisiana are just under $200,000.

 

Types of Coverage Coverage Amount
Replacement Cost (Dwelling) $200,000
Replacement Cost (Contents) $100,000
Personal Liability $100,000
Medical Expense $1,000
Deductible $500 (2% deductible for hurricane claims)

Naturally, this table only outlines average amount of coverage recommended for a $200,000 home. If your home cost less than that, then you won’t need to purchase nearly as much coverage. Most homeowners insurance companies will pay for repairing or replacing your structure regardless of what damage is it (with only a few exceptions). For personal property, on the other hand, you may need to purchase additional types of coverage in order to make sure you are completely protected.

Average Homeowners Insurance Rates in Louisiana Legend: Average Rate Baton Rouge Lafayette Lake Charles New Orleans Shreveport 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 3250 3500 3750 4000 $1797 $2286 $2625 $4111 $1488

 

Unfortunately for Louisiana homeowners, average premiums can vary wildly from one city to the next. This is because the higher populated cities, such as New Orleans, have higher property values and are located in Hurricane prone areas. More rural areas of the northern part of the state, on the other hand, tend to have lower property values, a lower population density, and are less vulnerable to severe weather. Shopping around, however, can help you find an affordable premium. Not all companies offer the same prices for their homeowners insurance policies. That’s why you should get quotes from a few different providers before you settle on a policy.

High & Low Property Insurance Rates in Louisiana Legend: Lowest Estimated Rate Highest Estimated Rate Baton Rouge Lafayette Lake Charles New Orleans Shreveport 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 $1581 $2372 $2012 $3018 $2310 $3465 $3618 $5427 $1309 $1964

Laws and Requirements

If you own your home outright, as opposed to having a mortgage, then you aren’t legally required to purchase homeowners insurance. However, this is still a really good idea. Especially in the state of Louisiana. Failing to protect your home financially, even if you own it completely, could prove disastrous if anything unfortunate happens to or on your property.

Taking a Home Inventory

How will you know how much coverage to buy? Well, you’ll need a lot more information than just the value of your home. You will also have to do what is called “taking a home Inventory”. this can help you decide how much and what types of coverage you will need to purchase in order to protect your personal property. Without it, you’ll have no idea how much you need to buy. If you underestimate the value of your property, your premiums will be lower but you will have to pay a lot more out-of-pocket if anything happens to your belongings. On the other hand, overestimating will significantly raise your premiums because you will be buying excessive amounts and types of coverage.

Choosing What (and How Much) Coverage

For certain things, like the structure of your home, there are very few things your policy will not cover. As far as your personal property is concerned, on the other hand, there are many different types of disasters and forms of damage that your policy will not cover. Knowing what your policy covers, and what it doesn’t, will determine how much coverage you need and whether or not you’ll need to buy additional Riders.

  • Fires –  On most homeowners insurance policies, fire and damage from fire are covered for the structure of your home but not your personal belongings. In fire-prone areas, there may be exceptions to this rule. Be sure to talk to your insurance agent about how high the risk of fire is in your area, and what you can do to protect against it. This may help to lower your premium.
  • Floods –  In the past decade or so, Mother Nature has proven that floods can strike anywhere at any time. To make matters worse, flood damage is extremely expensive to fix, and can often result in needing to replace Whatever Gets damaged. The vast majority of homeowners insurance companies do not cover flood damage for either your structure or your personal property. But you can contact the National flood insurance program for information on how to protect your home from flood related disasters. This includes hurricanes too.
  • Water Damage – Considering the fact that the most populous cities in Louisiana are not only on the coast but below sea level, water damage is a pretty serious and common problem. You will have to take a close and careful look at your policy to make sure that you have water damage coverage for both your structure and your personal property. If you don’t, and you think you need it, then be sure to ask your insurance agent about how to get it.
  • Hurricanes – Ever since Katrina hit the southern coast of Louisiana, it has been extremely difficult and expensive to insure a home against hurricane damage. If you are living in or near a coastal area, and you are afraid that you might suffer hurricane damage at any point in the future, be sure to ask your agent how to purchase hurricane insurance. Some policies included in their coverage options, well other companies may require you to purchase hurricane coverage from someone else. Lastly, some companies will sell you hurricane insurance as well as a homeowners insurance policy, but it will be two separate policies instead of a single comprehensive one.
  • Covering Your Property – Covering your home’s structure is easy. That’s why most homeowners insurance policies will pay out on claims due to almost any form of damage. Replacing your personal property, on the other hand, is a very different and much more expensive story. That’s why most homeowners policies will only pay out on claims made on personal property if they are damaged by a specific list of tragedies.Be sure to ask your agent which disasters are covered, and if you should purchase additional coverage to make sure you aren’t left holding the bill.
  • Liability Coverage – What happens if something bad happens on your property that is not considered a natural disaster? Depending on who or what it happens to, and the circumstances of the accident, you may be held financially liable. Thankfully, most homeowners insurance policies will protect you up to $100,000 and costs for the accident.
  • Umbrella Coverage – The recommended coverage limits we talked about earlier are only for the average Louisiana home. You may not be the average Louisiana homeowner. You may have a more expensive house, you may have more expensive personal property, or there may be other circumstances in your life that necessitate higher coverage amounts than your policy is willing to extend to you. This is what I’m brella coverage is for. It allows you to buy more coverage – up to the Millions on some policies – for your home and property.

Replacement Cost vs. Actual Cash Value

At certain points during the homeowners insurance buying process, you will undoubtedly hear the following terms: replacement cost, and actual cash value. These are very important terms that you need to know the difference between before you purchase a policy. When you talk about the replacement costs, you’re talking about paying 100% of what it will take to replace a brand new part of your structure or piece of personal property. Actual cash value, on the other hand, only pays for the replacement cost minus depreciation. With an actual cash value loss, you may be held more financially responsible then your insurance company forgetting something repaired or replaced.

How Your Credit Score May Influence Your Rate

By now, you’re probably aware that almost any major purchase you make in life will be determined by your credit score. Thankfully though, it goes a little bit differently when it comes to homeowners insurance. Homeowners insurance industry as a little bit more lenient when it comes to evaluating your credit score. Unlike other insurance companies, or Banks, you aren’t required to share your entire credit history with them before you purchase your policy.

What you are required to do instead as provide them with the past seven years of your credit history. And that history doesn’t come from all of your sources of credit; at usually just comes from things like auto insurance and health insurance payments. This is called a CLUE report. Usually, your homeowners insurance company will find a way to evaluate your clue report without you needing to take any additional action. But you do have a legal right to see your clue report before you start shopping for homeowners insurance. You should be able to get a copy of your clue report by contacting your local Department of Insurance office.

Louisiana Homeowners Insurance Rates by Credit Score Legend: Median Credit Homeowner Excellent Credit Homeowner Baton Rouge Lafayette Lake Charles New Orleans Shreveport 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 3250 3500 3750 4000 $1797 $1276 $2286 $1623 $2625 $1864 $4111 $2919 $1488 $1056

Learn More

For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:

The Louisiana Department of Insurance – Homeowners Page

The Official Louisiana State Government Website

Louisiana NFIP Website

Louisiana Insurance Guaranty Association

Or contact them directly through the following resources:

Louisiana Department of Insurance
P.O. Box 94214
Baton Rouge, LA 70804
Phone: 229-342-5900

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