More bad news on insurance - Houma Courier

<p>State Treasurer John Kennedy was in Houma last week with some terrible news: Many local homeowners will see sharp increases in their home insurance.</p><p>The increase is due to a recent decision by Citizens Property Insurance Corp. to hike its rates, meaning that those who rely on the state's insurer of last resort will pay more — a lot more.</p><p>In Terrebonne Parish, the rate hike will be an average of 52 percent — from $1,600 a year to $2,500. In Lafourche, there will be a 47 percent increase — from $1,600 to $2,400 a year.</p><p>Those are shocking rate hikes, and they aren't even as high as St. Mary Parish homeowners will face. There, the rates will rise from an average of $1,200 a year to $3,200.</p><p>Kennedy addressed the Houma-Terrebonne Rotary Club and used his appearance to rail against the rate increases.</p><p>Homeowners and business owners surely share his thoughts on the matter, that the rate hikes are too high and that they make it far too expensive to purchase insurance.</p><p>The fact that Citizens' rates matter so much is that it is almost impossible to purchase a new insurance policy from a private insurer. So that leaves Citizens to cover the rest.</p><p>That is a painful situation because with no real market, there is no competition, and the state must set the price for Citizens coverage without a good sense for what the coverage is really worth.</p><p>In a perfect world, Citizens would be irrelevant, unnecessary. All home and business owners would be able to purchase insurance from private companies without relying on the state to offer insurance.</p><p>That day, though, has not yet arrived.</p><p>Louisiana must work diligently to make our market — particularly the market where we are, close to the Gulf of Mexico — attractive to private companies.</p><p>A marketplace where companies compete for customers would certainly lead to lower rates. But how do we get there.</p><p>We continue planning and implementing as many projects as we can to protect us from future storms and flooding. We continue to seek the money we need to make our lives and homes and businesses safer.</p><p>If and when we succeed in bringing down the risk under which we all live and work, private insurers will want to be in this market.</p><p>Unfortunately, until then, we will be stuck with Citizens. With any luck, the rates it charges will come back down, but those rates are symptoms, not the disease.</p><p>What we need is a cure.</p><p>Editorials represent the opinions of the newspaper, not of any individual.</p>