The Louisiana Citizens Property Insurance Corp., which markets policies to homeowners and businesses in the state, will suffer only $35 million in financial impacts from the COVID-19 pandemic due to its reinsurance program, Louisiana Insurance Commissioner Jim Donelon said.
"In this record storm season, Citizens has received 6,341 claims from Cristobal, Laura, Sally, Delta and Zeta totaling $75.7 million through November 5, 2020. Citizens estimates that it will ultimately receive 10,278 claims with losses totaling $128.6 million for the 2020 storm season. Damage claims from Hurricane Laura alone will reach $65 million," the Louisiana Department of Insurance wrote in a press release posted on the department's website.
Of the $75.7 million in claims, Citizens will be paying $35 million instead of the full amount because of the company's reinsurance, which covers the rest of the claims.
"Our financial impact from the 2020 hurricane season will be lessened because of our robust reinsurance program," Richard Newberry, CEO of Louisiana Citizens Property Insurance Corporation, said in an email interview with the Louisiana Record. "We adhere to our mission statement to provide fair, reliable service to our policyholders while remaining financially sound and without assessments to property owners or insurance companies within the great state of Louisiana. We were able to accomplish this in spite of an unprecedented amount of hurricanes in 2020."
While the coronavirus pandemic is making an impact, the situation is far better than the $150 million assessment on all Louisiana insurance policies and the $900 million bond issue inf 2005 after hurricanes Katrina and Rita.
“I commend Citizens for its smart financial management,” Donelon said in the press release. “Citizens’ efforts are paying off for the people of Louisiana, who won’t face any special assessments from this record hurricane season.”