Shopping for Homeowners Insurance in Louisiana? Here are 5 important factors to consider.

For many in Louisiana, your home is one of the biggest financial investments you’ll ever make. Protecting it is nearly as important as the investment itself.

With so many things to think about, shopping for homeowners insurance, getting enough coverage, and purchasing the right kind of coverage is a big dilemma for Pelican state homeowners.

Add to that, Louisiana’s unique combination of risk and potential perils – hurricanes, flooding, and wind damage – and it’s enough to make even experienced homeowners unsure about which choice to make.

Here are 5 important things to consider when you shop for a homeowners insurance policy in Louisiana.

#1 – How Much Coverage Do You Need for Your Louisiana Home?

There’s really no right answer to this question. The answer is “it depends”.

All homeowner’s insurance policies, regardless of your state, generally consist of 3 parts:

  • Coverage for repairing or rebuilding your home’s structure or ‘dwelling’
  • Coverage for repairing or replacing your personal belongings inside of your home
  • Liability coverage for situations where someone might be injured in your home or damages your property – and vice versa

The general rule of thumb when insuring your home’s structure is to purchase enough coverage to cover the cost of rebuilding your home if it is destroyed.

Does Home Insurance cover what’s inside the house?  This is another very important factor to consider.   In order to insure your belongings you will need to be sure that your insurance policy covers your “contents”.  Determining the “right” amount of coverage for your belongings is just as important as the insurance on the home itself.  .

A trusted and reliable local insurance agent will be able to help you calculate your ideal coverage level based on how much it would cost to rebuild your home today and replace all of your belongings inside. You might want to do your own calculations, too, so you can compare notes.

#2 – Should You Go With a High Deductible or Low Deductible Plan?

Similar to health insurance plans, homeowner’s insurance plans can be configured with high deductibles or low deductibles, the amount you agree to pay before you can make a claim. But there are tradeoffs.

High deductible plans generally mean you’ll pay a reduced monthly premium, but more out-of-pocket when you file a claim. A lower deductible plan means you’ll pay higher monthly premium, but less out-of-pocket for claims. Deductibles can also be configured as a flat dollar amount, a percentage of your home’s value, or a hybrid option of the two. The ideal choice is the one that works best for your unique financial situation.

#3 – Do You Need Flood Insurance in Louisiana?

It’s no secret that Louisiana has its share of unique risks from natural disasters. Unfortunately, even the most comprehensive homeowner’s insurance policy won’t cover all of them, so you may need different types of coverage for specific risks – namely flooding, whether due to a hurricane, a freak rainstorm, or a simple sewer backup.

Flood insurance is available through FEMA’s National Flood Insurance Program (NFIP), and in Louisiana. NFIP policies generally cover up to $250,000 for a structure and $100,000 for building contents. If your property is valued above that coverage limit, you can get a supplemental policy through a private insurance carrier.

It’s important to note that properties in Louisiana – and throughout the country – that fall in high-risk flood zones require flood insurance, if you will be mortgaging the property. So it’s a good idea to check the flood zone for the property you’re purchasing so you can figure in the cost of an additional flood policy.

Properties located in low- to moderate-risk flood zones don’t have a flood insurance requirement. But may be a good idea to consider taking out a flood policy in case the unexpected happens.

You can check your property’s flood zone using FEMA’s flood maps tool as well as LSU AgCenter’s flood mapping site.

#4 – How Can You Save Money on Your Policy Premium?

Contrary to how it may seem, you aren’t totally between a rock and a hard place when it comes to your final policy premium. There are ways to reduce it.

Some insurers will extend you a discount by bundling multiple policies like auto insurance along with your homeowner’s insurance. You may also be eligible for discounts based on security features in your home like installed burglar alarms, deadbolt locks, or a sprinkler system. Homeowners insurance discounts may also available on properties that are up to building codes or  meet hurricane protection codes. It pays to shop insurers for policies or get a recommendation from someone you trust.

#5 – Are Louisiana Homeowners Insurance Rates Going Up?

Unfortunately, 2020 is seeing homeowner’s insurance rates on the rise. Louisiana Insurance Commissioner Jim Donelon recently told that homeowners might see a 5 to 10% increase in premium rates in 2021. This is in part due to the unprecedented 2020 hurricane season Louisiana experienced.

There are other factors that can drive premium rates up, too. Natural disasters in other areas, like earthquakes overseas and wildfires in the West, force the insurance industry as a whole to raise ratesFor more info on selecting the right homeowner’s insurance plan for your needs, check out these helpful resources:

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