Louisiana Insurance commissioner: Knowing your Insurance coverage crucial

Saturday, June 4, 2022

The Insurance Commissioner Jim Donelon said to know what your coverage is and Know your insured value, which has nothing to do with the appraised value of the home 

Donelon also said that the insured value brings into account the replacement costs of damages that can happen to your home in the case of a natural disaster

Commissioner Jim Donelon also documented three vital steps to take to support the policyholders to make their insurance work for them 

Be prepared to evacuate, and while evacuating, carry your essential documents, like copies of your insurance policy and, especially, the details on how to start the insurance claims process if necessary

Step 1

And before leaving, walk through your home and videotape or still photo your assets. Donelon said that all of your assets are covered by your insurance as part of your content coverage 

Donelon said taking the time to document property before a natural disaster is crucial to guarantee proper coverage. It is also very much useful to the policyholder to be able to portray the undamaged and real value versus attempting to rebuild what is left after the damage 

To contact your insurance professional and go over all your insurance needs, and it is also a proper time to do an annual checkup. Stand attentive on property insurance for both wind coverage and flood coverage 

Step 2

Insurance Policyholders with flood coverage are encouraged to keep it in place. If they are being underwritten, they have the privilege to continue that coverage and even pass it on to offspring through succession or to purchasers at a sale 

To know what your insurance doesn’t cover. Like, homeowner insurance does not cover floods. Naturally, fire, hail, tornado, and wind damage coverage comes with a name-storm or hurricane deductible 

Step 3

A third of the policies in the state has a 5% deductible on the insured value of your home. On the house valued at $200,000, the deductible for hurricane damage is $10,000 out of pocket 

Donelon said he thinks that everyone in Louisiana should have flood coverage. Only 25% of the policies in Louisiana do have flood insurance, which is less than that in Southwest Louisiana 

Commissioner Donelon said that when residents don’t think there’s a risk, they don’t want to spend the money. But we are all at significant risk everywhere in the state of Louisiana. He encourages everyone to access the even quite subsidized national flood insurance program 

Donelon said that the new rating system called Risk Rating 2.0 has moved into effect. This has dramatically increased the cost of flood insurance in vulnerable areas.

The National Flood Insurance Program used to be priced, by FEMA, based on the region or zip code of your home. However, the new Risk Rating 2.0 has changed the way the vulnerability of your home is assessed 

As per Donelon, The fundamental difference from the old system of pricing on zones is that now every policy is priced on an individual assessment basis. And Twenty percent of policyholders are predicted to see a premium decrease for the first year of Risk Rating 2.0 

70% of policyholders will see the tiniest additions of $10 per month or less, and 7 percent are experiencing increases of $20 per month or less. This new system started on April 1 for policy renewals and on October 1, 2021, for new policyholders