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Best Homeowners Insurance in Louisiana

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Unfortunately, many insurance companies won’t even quote those who live in coastal areas in Louisiana because of the natural flooding that has crept into the region since Hurricane Katrina and flooding in Baton Rouge.

This isn’t unique to Louisiana; many homeowners on the coast in other states face similar challenges and fewer options—and Louisianans aren’t the type to take no for an answer. There are other insurers, and there is also the Louisiana Citizens Property Insurance Corporation, a nonprofit insurer for those unable to buy insurance through the voluntary market.

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The Best Homeowners Insurance in Lousiana

Average Annual Premium in Louisiana

According to data assembled by the Insurance Information Institute, the average homeowners insurance policy in Louisiana costs $1,847. This makes the average cost of home insurance in the Bayou State considerably higher than the national average. Averages are made of highs and lows, with some coastal areas driving the average costs higher. Homes further inland have the benefit of land slowing the speed of force of storms from the gulf.

Finding the Best Premium for Your Home

Everyone likes to save money on their insurance and with the cost of home insurance in Louisiana, hope for lower premiums are even higher. It’s important to understand the key coverage areas of your home insurance policy so you can be sure that a great price doesn’t cost you more in the form of reduced coverage.

Dwelling Coverage

When we think of home insurance, we think of coverage for the house itself. This part of a policy is called dwelling coverage and while it is the largest part of the policy in regard to cost, it’s one of three main coverages on your policy. The amount of dwelling coverage sometimes also serves as a basis for other coverage amounts and for deductible amounts.

Most insurers use specialized software to calculate how much it will cost to rebuild your home if the home is a total loss due to a covered claim. Factors such as square footage, home features, construction type, and even location all go into the calculation. It’s important to note that the calculated rebuild cost may vary significantly from the market value of your home. Insurance for your home is for rebuilding your home as opposed buying another one. Many policies will automatically adjust the dwelling coverage amount by a fixed percentage each year, allowing for inflation in building costs.

Coverages related to your dwelling coverage include other structures. Sheds, workshops, detached garages, fences, etc. fall under this coverage, which is often set as a small percentage of the total for your dwelling coverage. Because this is usually a relatively small number, be sure this coverage is enough to rebuild the other structures on your policy if disaster strikes.

Personal property coverage

Despite the growing trend toward minimalism, most of our homes are filled to the brim with electronics, clothing, furniture, and other miscellaneous things, including some valuables. Personal property is the insurance term for your belongings. Many home insurance claims focus on the house itself, but in some cases, your personal property can be damaged or destroyed as well. Personal property coverage can help pay to replace items that are damaged or destroyed due to a covered claim.

There are, however, two different types of coverage that may apply to the personal property coverage on your policy. The first option, and arguably the better one, is replacement cost coverage. As its name suggests, replacement cost coverage provides protection for your belongings up to the full cost to replace the item. The other type of coverage is called actual cash value (ACV), and while this coverage does provide some protection for your belongings, it also depreciates the coverage amount based on wear and tear due to age.

Depending on the age of the damaged item(s), the living room set that cost thousands of dollars might only get a claim payout of hundreds of dollars in a covered claim. With both types of coverage, replacement cost and actual cash value, your deductible will still apply to any claims. The deductible is the amount you pay toward your claim. This structure—particularly if you have actual cash value coverage—has the potential to reduce the amount paid in a covered claim, and for smaller claims may even make the claim ineligible for payment.

Personal liability coverage

Claims for damage to the home are the most common type of homeowners insurance claim but personal liability coverage is another important part of your home insurance policy. In today’s litigious environment and with the rising amounts awarded by juries in lawsuits, it’s wise to review this coverage on your policy. Incidents such as dog bites and slip-and-fall accidents can easily lead to lawsuits and costly legal defense.

Many homeowners insurance policies come with a minimum of $100,000 in coverage for personal liability, which includes liability for injury to others as well as liability for damage to the property of others. Note that this coverage does not extend to your auto insurance policy, which will have its own liability limits. In most cases, you can increase the amount of liability coverage on your home insurance policy very inexpensively, with the most common choice being $300,000 in coverage.

The good news is that your legal defense is usually outside of the coverage amount, meaning the cost of your defense won’t reduce the amount of coverage available to cover a claim. If you want a larger amount of coverage, ask your agent about an umbrella policy which can extend your liability coverage on both your home and your auto insurance policy.

Important add-ons and considerations

Even the best home insurance policies have some holes in coverage—things we might think are covered, but aren’t. Many times, these holes can be addressed by choosing an option on your policy called a rider or an endorsement. Among the most common unpleasant surprises in a claim are roof coverage, water backup and sump pump overflow coverage and flood coverage. While coverage for floods requires a separate policy, the other two items can sometimes be addressed by choosing a better coverage option than the default on your policy or by choosing an insurer that offers the type of coverage you prefer.

Roofs are wear items, and are often depreciate in regard to insured value based on the roof’s age. In the real world, it doesn’t cost any less to replace an older roof than a newer roof, which leaves a hole in coverage on many policies. Ask your agent about roof coverage and ask for some examples of how the math works, including the effect of your deductible. You may be surprised to learn your roof isn’t as covered as you think. Also ask about your roof coverage options or consider an insurer that offers better protection for this common claim. Coverage for water backup and sump pump overflow, another common claim, is usually available as an add-on, but often is not included in a default policy.

Factors That Can Impact Your Rates

Your chosen coverage amounts determine a base premium, but other factors affect your final premium amount. These other factors can drive costs up or reduce your costs, depending on the amount of risk they might indicate. You can think of your premium as a reflection of the likelihood that an insurer will have to pay a claim, and how much that claim might be as determined by indicators used by the insurer.

Insurance companies look at things such as credit scores (a big one), claims history (another big one), crime rates, distance from a fire station, and how long you’ve been with your previous insurer. Every insurance company weighs these factors, and others, differently. If you aren’t happy with the quote from an insurer, another insurer may treat your individual risks more kindly, placing less weight on rating criteria that caused rates to be higher elsewhere.

Deductibles

The deductible is the part of the claim that you pay, and every home insurance policy has at least one deductible, and perhaps a few, each for a different claim type. While deductibles are unavoidable in the insurance game, it’s possible to use deductibles to adjust your premium amount. Choosing a higher deductible will lower your premium. You’re assuming more of the risk, so the cost of your insurance is lowered. Just be aware that deductibles are real money that you must pay if you have a claim. Choose a deductible amount that won’t cripple you financially if you do need to make a claim.

Hurricane deductibles

It’s common to have a different deductible for wind and hail damage vs. a separate deductible for all other covered perils. However, in areas affected by more frequent hurricanes, many insurers are requiring a third deductible for hurricane-related claims. The amount of this deductible, particularly if it’s based on a percentage of the dwelling coverage as opposed to a fixed dollar amount, can dramatically change how much you’ll be paid in a covered claim.

Be sure to understand this part of your policy, including your potential exposure—and don’t be afraid to shop around if you don’t like the numbers. In the event of a claim, the financial impact of this deductible could be thousands of dollars. Hurricane deductibles at five percent of the dwelling coverage aren’t uncommon, meaning a home insured for $200,000 would have a $10,000 deductible.

Discounts

Discounts can make the difference in an insurance premium, turning a policy that has the features you want into a policy that fits your budget as well. Most insurers offer a discount for bundling home and auto insurance. You might also find discounts for seniors, military service, membership in certain organizations, newer homes, safety features, and new home buyer discounts. Welcome discounts or early signing discounts are becoming more popular as well, but be aware that these types of discounts usually wear off quickly, raising your premiums as they expire.

Inclement Weather in Louisiana

Louisiana is famous for its food, its music, its unique culture and its weather. Even the ferocity of hurricanes doesn’t daunt the spirit of Bayou State residents, but hurricanes and tropical storms can do some significant damage to homes in their path. Among the most damaging in recent memory was Hurricane Katrina, causing $108 billion in damage, much of it centered in Louisiana. With its marshy coastline, Louisiana finds its shores often changing with each storm, as land submerges in salty water—and as new land emerges in other places, sprouting new growth.

Unlike northern states that have to worry about snow and ice, Louisiana’s main perils are wind and water damage and is second only to Hawaii in regard to annual rainfall. Louisiana receives up to 60 inches of rain annually, compared to a national average of about 30 inches. The state also faces risks from sinkholes in some areas, and seemingly a paradox for a state marked by marsh and swampland, wildfires can also be a risk.

Flood Insurance

With double the national rainfall average and a coastline that forms a bulls-eye for storms coming up from the Gulf of Mexico, Louisiana has more than its share of floods, a peril not covered by a standard homeowners insurance policy. With the possible exception of mountaintop cabins, nearly all homes are at risk to damage from floods. In fact, nearly a third of flood claims paid by the National Flood Insurance Program (NFIP) in recent years have been for flood damage in low-risk areas. Floods are dangerous—and can be unpredictable, unless you live right next to water or in a low-lying area, in which case it’s just a matter of time before a flood affects your area.

Most insurance agents can bind flood coverage, either through a private insurer or through the NFIP. Expect rates to vary based on elevation, proximity to water, and the insured value of your home and personal property. Areas with higher risk will have higher premiums, but costs can be managed, in part, by utilizing higher deductibles. Many flood insurance customers think of their policy as being for a worst-case scenario, a total loss or significant damage, and expect to pay for smaller damage themselves.

Special Considerations When You Live on the Coast

Over a third of Louisiana’s insured property (in dollars) is in a coastal area, representing nearly $300 billion in insured property. Over time, many of the single story homes nearest the coast have been replaced by newer homes which are raised on stilts or which have minimal living area on the first floor. This type of building keeps the main parts of the home above surge and flood levels. Construction of these raised homes can be costly and materials and building techniques meant to withstand storms can add to the cost both of building the home and insuring it.

Many well-known national insurers, both in Louisiana and in other states, don’t write business within a predefined distance from the coastline, preferring to do business in areas where the risks are better understood and the claims are less costly. However, there are specialty insurers who invest their resources in understanding the unique risks of coastline living and price policies accordingly. Louisiana also has The Louisiana Citizens Property Insurance Corporation, a state-run entity which underwrites most coastal properties and can provide insurance when the private market is unable to insure a property.

As a coastal consumer shopping for a policy, it’s important to look at coverage details but also to look at the financial strength of your insurer. Not including flood losses, the combination of Hurricane Katrina and Hurricane Rita, which closely followed Katrina, caused a total of $29 billion in insured losses all at once. Catastrophic losses of that magnitude, or even smaller, can drive insurers out of the area, the state, or out of business.

Most Affordable Cities

It’s clear that home insurance rates in Louisiana can vary widely by location. Both nationally and locally, wind and hail are the leading cause of insurance claims covered by homeowners insurance. Areas nearer to the coast are likely to pay more due to the more prevalent risk from storms and hurricanes and the damage they can cause to homes. Factors such as crime rates and distance from a fire station will also affect rates in some areas, as will the common home types and the types of construction commonly used in those homes. Areas with overall lower risks will, in general, have lower home insurance rates.

Among the most affordable areas for home insurance in Louisiana are:

  • Shreveport
  • Alexandria
  • Brandenburg
  • Monroe
  • Ruston

Most Expensive Cities

Among some of the more expensive cities in Louisiana for home insurance are:

  • Cameron
  • Houma
  • New Orleans
  • Chalmette
  • Kenner

The most expensive area, Cameron, has an average home insurance rate of over five times the national average. New Orleans isn’t far behind in its race to the top of the home insurance rates chart, with average premiums of over $4,000, compared to a national average of $1,132.

Top Picks for Louisiana

Pros
  • Website provides helpful information
  • A nationwide network of over 18,000 agents
  • Sizable discount on auto policies for customers who also purchase life insurance
Cons
  • Premiums may be higher than some competitors
  • Less flexibility in term lengths

1. State Farm

State Farm is ubiquitous throughout the U.S., but like in other states, you may have some challenges in getting coverage near the coast. Residents in other parts of the Bayou State can enjoy multi-policy discounts by combining auto and home with one of the leading providers of both types of insurance.

State Farm is particularly good if you need more than one type of property insurance, like homeowners and landlord insurance.

Some competitors offer other property insurance types as well but aren’t as invested in being a full-service insurer. Customers who enjoy doing business in person are likely to find a State Farm agent office nearby.

2. Louisiana Farm Bureau

With a local parish office in each parish of Louisiana, Louisiana Farm Bureau Insurance focuses its business on providing top service to its customers where they live.

Offering insurance products ranging from auto to home, and even farm and flood insurance, earning a multi-policy discount couldn’t get any easier than with Louisiana Farm Bureau Insurance.

Banking, life insurance, and financial planning are also on the roster for this full-service local insurer that knows Louisiana like no other.

Pros
  • Ease of online service or through an agent
  • Clear claims process
  • Useful mobile app
Cons
  • Average customer satisfaction for claims
  • Optional coverage like yard and garden not available in every state

3. Allstate

With nearly as many agents as State Farm, which has about 18,000 agents nationwide, Allstate is another familiar name with local offices within convenient driving distance.

Allstate agents are exclusive agents, and with few exceptions only sell Allstate products, making most representatives you’ll encounter experts on policy details.

Discounts are available for bundling auto with home and new home buyers and early signing discounts are available as well. Like State Farm and many others, Allstate won’t quote or bind coverage in riskier coastal areas.

Pros
  • A long and considerable list of discounts that can save you hundreds of dollars
  • An excellent roster of online tools, including a comprehensive coverage calculator, and a highly-rated app for iPhone and Android systems
  • Ability to manage and track claims directly from computers or mobile devices
Cons
  • Decent financial stability, but could be improved
  • Customer service and claims handling not always consistent or satisfactory
  • Certain natural disasters, including floods and earthquakes not covered under a traditional policy — a rider needs to be purchased that includes the specific coverage if needed

4. Liberty Mutual

In a way, a mutual company is an essence of what insurance should be, a shared risk— but underwritten by a company owned by its customers. Liberty Mutual has been writing policies for over a century, beginning a business as The Massachusetts Employees’ Insurance Association.

This insurer with northern roots shows its southern hospitality by way of discounts. Discounts are available for bundling home and auto, like with most other insurers, but Liberty Mutual also offers a strong list of other discounts, including discounts for members of various groups and alumni, which increase your chances of qualifying for extra savings.

Homeowners coverage isn’t available in coastal areas and hurricane deductibles are required throughout the state with Liberty Mutual. However, full replacement cost is available for personal belongings, along with a concierge service that helps you locate a replacement for damaged items.

Pros
  • Discount for bundling
  • Access to vetted companies
Cons
  • Doesn’t directly offer home insurance
  • Mobile app doesn’t support home insurance

5. Progressive

As in other states, Progressive doesn’t underwrite its own home insurance policies in Louisiana. Home insurance for the state is offered through Progressive’s network of affiliated companies.

Unlike Allstate or State Farm, which sells through exclusive agents, Progressive sells insurance through independent agents, a valuable benefit in itself. Independent agents have access to policies from multiple companies and can help you to cut through insurance marketing sludge, focusing on the companies that offer policies that meet both your needs and your budget.

In Louisiana, where some companies don’t offer coverage in many areas, an independent agent who has a plan B ready to quote is a good person to know.

Take Action

Every state has its unique traits in regard to weather risks and insurance shopping, but Louisiana can be among the most challenging for consumers. However, the state does have insurance options for homes in any area and the great food and soulful music help to offset the inconvenience of home insurance shopping in the state. 

Due to the risk of hurricanes and flooding, Louisiana residents should pay extra attention to policy details. Many insurers are looking for ways to reduce exposure in the state, evidenced by mandatory hurricane deductibles throughout Louisiana, even in low-risk areas. A high deductible that wasn’t questioned or an overlooked add-on coverage can be costly if you want to place a claim.

Frequently Asked Questions

1) Q: How does home insurance liability coverage work?

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1) Q: How does home insurance liability coverage work?
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Most home insurance policies provide liability coverage that can help protect you and your family against several types of lawsuits or liability claims. Coverage limit options usually begin at $100,000 and can go as high as $1 million. Your liability coverage provides coverage for common mishaps, like slip and fall accidents or animal bites and can protect you even when you are away from home. However, home insurance liability coverage does not provide coverage for automobile-related liability or liability related to business activity. Get the best home coverage and policy through our top providers today.

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2) Q: What are the most common types of home insurance claims?

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2) Q: What are the most common types of home insurance claims?
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Wind and hail claims top the list with nearly 40% of all home insurance claims due to these two acts of nature. Fire and lightning are the second most common, but claims due to fire tend to much bigger than claims dues to other types of risk. The possibility of a total loss is why it’s so important to insure your home for the full cost of rebuilding. Get a custom quote today.

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3) Q: If I drop my computer, will home insurance cover the cost of replacement?

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3) Q: If I drop my computer, will home insurance cover the cost of replacement?
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Home insurance policies usually cover personal property for a specific list of risks, called named perils. These perils might include fire, theft, burst pipes, and more, but dropping your laptop or TV or spilling soda on your new game console isn’t covered. See the best home insurance providers for a custom quote.

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