Donelon: Car Insurance Rates Will Go Up Because Of Floods
Louisiana residents who live in areas that flooded this year will pay more for car insurance as a result of the 2016 floods, according to state Insurance Commissioner Jim Donelon. He says drivers’ comprehensive coverage will go up because over 100-thousand cars were destroyed by the flood.
“When there’s a cataclysmic event, like the flooding that hit Lafayette and Baton Rouge in particular, those costs go significantly higher than typically would be the case,” Donelon said.
Donelon says when companies file rate increases, it’s based on losses they’ve covered in previous years. In the August flood event, he says there were 60-thousand flooded vehicles that will be paid for by insurance companies.
“This recent event for the next couple of years will be factored in to the calculation of what it costs for an insurer to profitably do business in a particular area,” Donelon said.
Donelon says the amount of the rate hike will vary from one company to another. He says people who live in areas that did not experience any flooding will not see the rate increase, but those that did flood should expect their rates to go up in years to come.
“They’ll start seeing them not in the immediate future, but certainly in rate filings for 2017 and beyond,” Donelon said.