Louisiana Citizens Insurance Review

Louisiana Citizens Property Insurance Review

The Pelican State is a unique location within the U.S. Its intricate network of bayous and canals make Louisiana a whole other world. Unfortunately, because it is a Gulf state, Louisiana does get hit by hurricanes and other disasters. As of 2018, the state had the highest average cost for homeowners insurance ($1987 per year).

With the threat of natural disasters, many Louisiana homeowners can have trouble finding coverage. Fortunately, there's Louisiana Citizens Property Insurance. This company is the "insurer of last resort," and the state owns it. So, if a home or property owner cannot get insured through private carriers, they can buy an insurance policy with Louisiana Citizens Insurance.

So, let's break down how Louisiana Citizens Property Insurance works.

The Protection
Residents can qualify for a wide range of insurance policies with LCPIC. Here is a rundown of each option.

DWG 1 - Homeowners and Landlord Insurance
This policy is a bare-bones type of insurance often reserved for unoccupied buildings. However, landlords or homeowners on a budget may also want to use DWG-1 insurance.

The only hazards Louisiana Citizens Property Insurance covers in this basic plan are listed below.

  1. Vehicle Damage
  2. Aircraft Damage
  3. Vandalism and Malicious Mischief
  4. Fire and Smoke Damage
  5. Wind and Hail Damage
  6. Riots and Civil Unrest
  7. Explosions
  8. Volcanic Explosion
  9. Lightning

Explosions do not include burst pipes, electrical surges, illegal activities like meth labs, or negligence such as fireworks gone bad.

As you will notice, this policy does not have all the same protections as standard homeowners insurance. For example, while home insurance covers sixteen perils, DWG-1 only covers nine.

The policy protects the following property:

  • The main structure of the building
  • Other detached structures (i.e., a pool house or gazebo)
  • Personal property

Unlike standard home insurance, you do not receive additional living expenses or liability coverage.

For landlords, Louisiana Citizens Insurance DWG policies include something called "fair rental value." If you cannot rent out the property during repairs after a covered peril destroys it, you can claim fair rental value to reclaim lost income. The maximum claim amount is 10% of your coverage for the main structure.

This policy is an option for homes, condominiums, or mobile homes.

DWG 3 - Landlord Insurance
Louisiana Citizens' Landlord Insurance is an upgrade of a DWG-1 plan, but it still has some significant limitations. For example, the policy does not include liability coverage. As a landlord, you need liability insurance if something happens and a tenant or visitor gets hurt and sues you.

Otherwise, the policy details are very similar, except DWG-3 includes extra perils. DWG-3 covered hazards are:

  1. Vehicles
  2. Aircraft
  3. Fire and Lightning
  4. Volcanic Eruption
  5. Falling Objects
  6. Burglary
  7. Accidental Discharge/Overflow of Water
  8. Vandalism and Malicious Mischief
  9. Pipes Freezing
  10. Weight of Sleet, Ice, and Snow
  11. Electrical Damage
  12. Riot and Civil Commotion
  13. Hail and Windstorm
  14. Glass Breakage
  15. Internal or External Explosion
  16. Smoke
  17. Collapse

DWG-3 also has coverage for the collapse of a house if caused by one of those perils. The plan may also pay for collapses if they are related to:

  • Hidden Decay
  • Hidden Vermin or Pest Damage
  • Weight of Contents, Animals, or People
  • Weight of Accumulated Rain
  • Defective or Shoddy Building Materials

Louisiana Citizens' Landlord Insurance does not cover a collapse caused by the foundation settling, cracking, bulging, or shrinking. Also, keep in mind that the conditions listed above only count for the main structure collapsing.

Any other buildings do not count unless they are damaged or destroyed by the collapse itself. So, for example, you cannot file a claim if a retaining wall gives out because of hidden decay. However, if the house collapses because of hidden decay, causing the retaining wall to give, you can.

This plan does not define "hidden decay," but examples could potentially include dry rot or wet rot. That said, the cause of the rot may affect your claims. For instance, if rotting wood happens because of a flood, you may not have coverage.

Also, the policy excludes mold damage, although you can sometimes add it as an endorsement.

As with DWG-1, this policy includes fair rental value coverage for landlords.

If you are living in the home, Louisiana Citizens Insurance allows you to claim additional living expenses. This coverage only applies when the house is unlivable after it gets damaged by a covered peril. ALE helps pay for costs associated with hotel stays and other living expenses homeowners incur.

Finally, DWG-3 also covers trees, shrubs, and other plant damage from named perils.

DWG 1 and 3 - Wind and Hail Only Insurance
Since hurricanes are a threat to Louisiana homes, you can buy a separate wind and hail policy. Unfortunately, regular home, condominium, mobile home, or landlord insurance does not cover hurricane winds. So, if a storm rolls through the area, you might not be able to file a claim.

This insurance may include a hefty deductible. Louisiana Citizens Insurance's wind and hurricane deductible can be one of three options:

  • Hurricane Deductible. If the National Weather Service declares a hurricane warning (winds of 74 mph or higher).
  • Named Storm Deductible. If the NWS names a tropical storm with winds of 39 mph or higher.
  • Wind and Hail Deductible. This deductible kicks in for any wind and hail damage from any storm source.

HO3 - Standard Homeowners Insurance
This policy is the most common for homeowners in Louisiana. Here is a full breakdown of what Louisiana Citizens includes in its HO3 Home Insurance Coverage:

  • Dwelling Coverage. The policy protects the house itself from sixteen named perils.

    Perils Covered by Home Insurance
  • Other Structures. Any detached buildings on the property have coverage for up to 10% of the dwelling coverage.
  • Personal Property. Typically, personal property insurance only pays actual cash value (ACV). However, for better coverage, you can often upgrade to replacement cost value (RCV). It typically covers you up to 30-70% of your dwelling coverage, minus your deductible, but there are sub-limits for categories of things. See the image below.

    Personal Property Sub-Limits
  • Loss of Use. As with DWG-3 insurance, this coverage pays for expenses if you cannot stay in your home because of damage.
  • Personal Liability. Your policy covers lawsuits for personal injuries and property damage that may occur on or off your property. This coverage only protects visitors and non-residents, though.
  • Medical Payments Liability. Personal liability protection pays for healthcare costs of guests if they do not sue you. This section only pays for medical bills, up to $5,000.

As far as perils, homeowners insurance covers the following:

  1. Theft
  2. Vandalism
  3. Accidental and Sudden Water Overflow from Appliances, Plumbing, or Sprinklers
  4. Vehicles (not owned or operated by you)
  5. Weight of Ice, Snow, or Sleet
  6. Explosions
  7. Electrical Currents
  8. Aircraft
  9. Fire and Lightning
  10. Smoke
  11. Freezing of Plumbing
  12. Riots
  13. Falling Objects
  14. Hail
  15. Volcanic Eruption
  16. Windstorm

Keep in mind that Louisiana Citizens Insurance policies do not cover flooding or earthquakes. Since flooding can be a problem in Louisiana, it is worth it to buy separate flood insurance. You can do that through the National Flood Insurance Program (NFIP) or a private insurance company.

HO4 - Renters Insurance
Since you do not own the property, renters insurance only covers your personal belongings. This policy also offers additional living expenses and personal liability coverage. Overall, the only difference between an HO4 renters policy and HO3 home insurance is a lack of dwelling coverage in an HO4.

HO6 - Condo Insurance
This policy works almost the same as homeowners insurance. However, since you have a condominium association, there is limited dwelling coverage. Therefore, you only need coverage for the portions of your condominium that you own.

Property insurance covers any renovations or alterations to your unit and possibly interior walls, built-in cabinets, wall coverings, etc. However, it does not cover whatever your condominium association owns, like the structure of exterior walls, ceilings, floors, and anything else they own.

When it comes to shared condominium areas, such as hallways, elevators, or shared spaces, the condo board should have its own master building insurance.

HO7 - Mobile Home and Manufactured Home Insurance
Mobile home insurance is also like a homeowners policy. It covers the same perils, has a coverage limit usually matching the cost to buy a new mobile home, and includes a deductible. The policy might come with ACV coverage, which deducts depreciation from property claims. But you can upgrade to RCV claims coverage.

Louisiana Citizens Insurance requires all mobile and manufactured homes to be permanently anchored to the ground or a foundation.

HO8 - Named Perils Insurance for Older Homes
Because older homes are harder to replace, you must get a different kind of insurance policy. HO-8 plans work similarly to HO-3, with a few notable exceptions.

HO8 policies for older homes only cover ten perils. They are:

  1. Fire and Lightning
  2. Wind and Hail
  3. Explosions
  4. Riots or Civil Commotion
  5. Damage From Aircrafts
  6. Vehicle Damage
  7. Theft
  8. Vandalism
  9. Smoke Damage
  10. Volcanic Eruptions

Falling objects and the weight of ice and snow are not protected. Also, sudden and accidental water damage is not covered, either. So, if a water pipe bursts and floods the home, you are out of luck.

HO-8 insurance may also subtract depreciation when paying a claim. In that case, you will not get the total replacement cost value.

The Carrier
Louisiana Citizens Property Insurance Corporation was founded in 2003 as a state-run provider. LCPIC is an upgrade from the Louisiana Citizens FAIR Plan.

Since this company offers insurance of last resort, the state mandates it to have higher prices. As a result, LCPIC sets its insurance rates 10% higher than private insurers. This non-competitive pricing ensures that residents will attempt to find private plans first.

LCPIC has a rating of A+ from Fitch Credit Rating company. Fitch is one of the top credit rating companies, much like AM Best. This rating means that LCPIC can fulfill its obligations readily and easily. This is a plus for policyholders since hurricanes regularly strike in the state; LCPIC needs to be able to pay out claims.

There is only one phone number for LCPIC, which works for billing, policy details, and insurance claims.

Louisiana Citizens Insurance Claims Number: 1-888-568-6455.

Where is Louisiana Citizens Property Insurance Available?
The answer is right in the name. Since Louisiana Citizens Insurance is a state-run agency, you cannot get coverage outside of Louisiana.

Louisiana Citizens Property Insurance Review

The Claims
Landlords and homeowners can file a claim in one of two ways. First, they can file online through the claim portal. Second, they can call the 800 number and file through there.

From there, a Louisiana Citizens Insurance claims adjuster will contact the policyholder to discuss pertinent information. Part of the process is to determine whether fraud occurred. The adjuster will set up a damage inspection to assess the repair costs. Overall, the claims process can take a few days or weeks, depending on the situation.

In cases with replacement cost coverage, policyholders will often receive two checks. The first claims check is for the actual cash value (ACV) of the property or item. The second check is for the remaining value if you have RCV coverage.

The Conclusion
Finding homeowners insurance in Louisiana can be a challenge. If you are struggling to get coverage through a private insurer, LCPIC may be the best option. We can help you get sufficient coverage for your home, so click below for a Louisiana Citizens Insurance quote.

Hope that helps!

Free Online Louisiana Citizens Insurance Quotes

At your service,
Young Alfred