September 9, 2025
Louisiana homeowners face soaring insurance costs and limited options amid ongoing hurricane risk. Learn how reforms and risk strategies can help navigate the market.
Louisiana faces one of the most challenging homeowners insurance markets in the United States, with rates that are among the highest nationally and availability that continues to be constrained. As the state emerges from a prolonged insurance crisis that began in 2020, understanding the current landscape is crucial for property owners, lenders, and industry professionals.
The average cost of homeowners insurance in Louisiana in 2024 is $4,031. This figure is $1,608 more than the national average of $2,423. However, recent projections suggest continued challenges ahead. One projection from Insurify estimates that rates could rise as much as 27%, potentially reaching $13,937, though actual rates may vary widely based on local risk factors and insurer participation.
This dramatic increase reflects Louisiana's position as one of the most hurricane-prone states in the nation. Louisiana, along with Florida, is almost the riskiest state when it comes to large tropical storms. The frequent occurrence of catastrophic weather events has fundamentally altered the risk profile for insurers operating in the state.
Since 2022, a growing Louisiana homeowners insurance crisis has seen at least 11 Louisiana home insurance companies go into insolvency, and a similar number of companies announce they will no longer write policies in the state. This mass exodus of insurers has left many homeowners with limited options and has driven up costs significantly.
The crisis reached its peak following devastating hurricanes between 2020 and 2021, including Hurricane Laura and Hurricane Ida, which caused billions in damage and sent multiple insurers into bankruptcy.
Despite the challenges, there are signs of stabilization. Insurance Commissioner Tim Temple's property insurance reform package, which aims to attract insurers back to the state and slow the increase in insurance rates, is showing some results. Since 2024, 10 new insurers have begun offering insurance products in Louisiana, and the number of rate increases requested has decreased significantly.
Key reform measures implemented in 2024 include:
House Bill 611: This legislation removed the "three-year rule" that previously prevented insurance companies from canceling policies that had been in force for more than three years. Under the new law, insurers can now cancel up to 5% of their policies annually.
File and Use Rating System: Temple said that approved homeowners insurance rate increases in 2024 averaged 6.6%, compared with 14% in 2023 and 16.2% in 2022. This improvement is attributed to new regulatory frameworks that streamline rate approval processes.
Fortify Homes Program: The state has expanded this mitigation program, which provides up to $10,000 to homeowners for roof improvements and storm-resistant upgrades.
Louisiana Citizens serves as the state's insurer of last resort, similar to Florida's Citizens Property Insurance. Following the home insurance exodus, an increasing number of homeowners are obtaining coverage through Citizens. As a result of the plan growing at a rapid pace, Citizens implemented a 63 percent rate increase beginning January 2023.
By design, Citizens charges approximately 10% above market rates to avoid competing with private insurers. However, as private market options have dwindled, Citizens has become the primary option for many Louisiana homeowners, particularly in coastal parishes.
Louisiana's position along the Gulf Coast makes it particularly vulnerable to hurricanes. Most policies in coastal parishes include mandatory hurricane deductibles ranging from 2% to 5% of Coverage A (dwelling coverage). These higher deductibles reflect the increased risk and help insurers manage catastrophic losses.
Flood insurance is crucial for nearly all Louisiana properties, even those outside FEMA-designated flood zones. Standard homeowners policies exclude flood damage, making separate flood insurance through the National Flood Insurance Program (NFIP) or private carriers essential.
Insurers heavily scrutinize roof conditions in Louisiana. Properties with roofs over 10-15 years old may only qualify for Actual Cash Value (ACV) coverage rather than replacement cost coverage, or may be ineligible for coverage without updates.
Given Louisiana's humid climate and frequent water intrusions, mold coverage is often limited or excluded from standard policies. Water and sewer backup coverage is recommended for all policies, particularly in urban and coastal areas.
To provide context for Louisiana's insurance challenges, here's how the state compares to its neighbors:
Source: Insurance.com 2024 data
While Louisiana's rates are high, they are comparable to other Gulf Coast states facing similar risks. However, Louisiana's market instability and limited insurer participation set it apart from neighboring states.
Insurance costs vary significantly across Louisiana, with coastal parishes experiencing the highest rates:
The variation reflects differences in hurricane risk, flood exposure, and local claims history.
The immediate outlook for Louisiana homeowners insurance remains challenging. Louisiana currently has among the highest average rates for home insurers nationally, with some projections suggesting potential rate increases of up to 23 percent by the end of 2024.
Climate scientists predict continued active hurricane seasons, which could further pressure rates upward. However, the regulatory reforms implemented in 2024 may begin to show positive effects as more insurers enter the market.
Temple believes the steps Louisiana has taken will improve the insurance landscape. "We're talking 18, 24 months before Florida started to see the changes and benefit from those changes. And I think that's what Louisiana can expect as well," said Temple.
The comparison to Florida's insurance reforms is encouraging, as Florida has successfully attracted new insurers and stabilized rates following similar regulatory changes. However, Louisiana's recovery will likely take several years to fully materialize.
For mortgage servicers and lenders working with Louisiana borrowers, partnering with experienced insurance specialists can help navigate this complex market. Covered offers warm transfer services designed to support customer experience and operational efficiency. By connecting borrowers directly with licensed insurance professionals where required, servicers can help ensure their customers receive appropriate coverage while reducing the administrative burden of insurance-related calls. This approach may help borrowers access a range of options, including from new market entrants and surplus lines carriers, while minimizing exposure to coverage gaps that could affect loan security. Individual results may vary based on service model and borrower demographics.
Given the challenging market conditions, Louisiana homeowners should consider the following strategies:
Louisiana's homeowners insurance market remains one of the most challenging in the United States, with rates well above national averages and limited insurer participation. However, recent regulatory reforms and stabilization efforts provide reason for cautious optimism. The state's experience mirrors Florida's earlier crisis, and if Louisiana follows a similar trajectory, meaningful improvements may emerge over the next 18-24 months.
Property owners, lenders, and industry professionals must remain vigilant about market conditions while taking advantage of available mitigation programs and coverage options. As new insurers enter the market and rates begin to stabilize, Louisiana may gradually return to a more balanced insurance environment, though this transition will require sustained effort from regulators, insurers, and property owners alike.
The key to navigating this market successfully lies in understanding the unique risks, staying informed about regulatory changes, and working with licensed insurance professionals where applicable to help identify suitable coverage options based on the homeowner's needs and available market offerings.
This article provides general information about Louisiana’s homeowners insurance market based on available industry data as of 2025. Individual circumstances vary significantly, and premium quotes, coverage options, and policy terms differ by insurance company. Consumers should consult with licensed insurance professionals for specific coverage recommendations and current pricing. Information presented should not be considered as guaranteed outcomes or personalized insurance advice.
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*Savings claim based upon averaging actual anonymized savings data for dwelling-only insurance rates paid (from July 2023 - June 2024) by customers of two of Covered’s largest mortgage industry partners across twenty-seven (27) US states. Bundles and non-dwelling insurance coverages were excluded.
† Net Promoter Score (“NPS”)® calculation averages post-purchase customer satisfaction surveys from 9/24/2024 - 2/28/2025. NPS® is a market research metric measuring customer satisfaction with a scoring calculation that incorporates both detractor and promoter customer feedback.
Quotes are presented solely for your convenience. Savings may vary. Rates are subject to change based upon the specific coverage you select and other factors that apply to your situation. CA License #0M81402, doing business as Cubbard Insurance Solutions in California.
