By: Ramu Garuda June.10, 2019
In a study of home insurance quotes in Louisiana, Gavop found that the average in the state is $1,967, much higher than the national average of $1,218. The geographical location of the state makes it susceptible to some of the worst natural disasters in the country. These risks lead to higher insurance rates. Data reveal that in recent years, Louisiana homeowners have suffered heavy losses from natural disasters. According to the Insurance Information Institute, the number of flood insurance policies in the state increased from 491,311 in 2016 to 498,271 in 2017. About 817,500 homes were at risk from Category 5 hurricanes in 2018.
Data published by statesatrisk.org reveals that about 955,000 people in Louisiana are currently at risk of coastal flooding. By 2050, an estimated 1.2 million people will be under threat because of rising sea levels. Out of 48 states located around the coasts, Louisiana has the largest coastline area, of about 5,500 square miles, which is likely to increase to about 7,000 square miles because of a rise in sea levels by 2050. By 2015, about 79% of the total population in Louisiana was living in the coastal areas, thus increasing the risk of homeowners likely to be affected by storms and floods.
The above image lists five of the most populated cities of Louisiana, along with their probability of being hit by a flood by 2040. According to data, New Orleans, with the highest population, also has the highest probability (73%) of being hit by a major flood. It is followed by Baton Rouge at 70% and Shreveport at 65%. ,Lake Charles, with a population count of about 75,194, has a 33% probability of being hit by a big flood by 2040, while for Lafayette the probability estimate is at 35%.
Home insurance buyers will do well to remember that every claim they file will likely increase their premium. Insurance companies decide individual premiums after assessing the buyer’s claims history, and therefore Gavop strongly recommends that homeowners follow a protocol for filing claims. Typically, the average span for US homeowners to file a claim is 10 years. First, you need to decide if the damage sustained is more than the deductible amount. If yes, then check your claims history to know when was the last time you filed a claim. If that time was less than 10 years ago, then be sure that your current claim is completely unavoidable. A few other points to check are whether the damage is a covered peril and whether the damage occurred despite adequate maintenance or due to some negligence. If the answer to all of these questions is yes, only then is it advisable for a homeowner to go ahead and file a claim.
The chart below reflects the change in insurance premiums for consumers with and without a history of filed claims, obtained from five of the cheapest home insurance providers in the state. Gavop arrived at these numbers by using data collected from the Louisiana Department of Insurance.
Ramu is a research analyst with over 7 years of analytics & research experience. Prior to joining the company, he worked with some of the prominent consulting and market research firms in India, including Pride Technology (Supporting consulting projects to PWC), RR Donnelly, and The Hackett Group. His skills include company profiling, benchmarking, data and trend analysis, industry analysis, and report writing across the industries. Ramu holds a Master’s degree in Finance and Marketing. He also has a bachelor’s degree in Biotechnology.