Major Insurance Company to Refund $4 Million to Louisiana Policyholders After Overcharges

BATON ROUGE, La. (KPEL News) – Thousands of Louisiana residents will soon receive refunds from Liberty Mutual, as the insurance provider is set to pay back approximately $4 million after overcharging policyholders on a state-mandated insurance assessment.

The Louisiana Department of Insurance (LDI) discovered the error after a consumer complaint flagged an incorrect charge on a Liberty Mutual renewal notice. Following an investigation, it was revealed that the company failed to update the Louisiana Citizens Property Insurance Corporation Emergency Assessment percentage since 2021—resulting in policyholders paying more than they should have for years.

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Who’s Getting a Refund?

According to Louisiana Insurance Commissioner Tim Temple, around 138,000 policyholders—both current and former—are owed refunds due to the miscalculation.

"I have spoken with Liberty Mutual about the issue, and they told me they corrected the error and will send refunds to all active and inactive policyholders that were impacted," Temple stated. "The LDI will monitor the company repayments to ensure policyholders receive all the funds they are due."

Temple also confirmed that LDI is still reviewing the situation to determine if further regulatory action is necessary. However, at this time, the error appears to be isolated to Liberty Mutual, and the department is working to ensure no other insurers made similar mistakes.

What Caused the Overcharge?

The Louisiana Citizens Property Insurance Corporation Emergency Assessment was originally implemented to help Louisiana Citizens pay off bonds issued to cover claims from Hurricanes Katrina and Rita in 2005. Over time, the assessment was gradually reduced, and in January 2024, the Louisiana Citizens Board of Directors officially voted to end the charge as of April 2024.

While Liberty Mutual correctly remitted payments to Louisiana Citizens, the company failed to adjust its charges to customers, meaning policyholders were overpaying on their assessments without realizing it.

What Should Policyholders Do?

Liberty Mutual has since adjusted the assessment charge to 0 percent for affected policyholders as of April 1, 2024.

For those who previously held policies with Liberty Mutual, refunds will still be issued, and both current and former policyholders are encouraged to reach out if they have questions about their repayment.

Who to Contact:

• Liberty Mutual Customer Service
• Your insurance agent

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Why This Matters for Louisiana Policyholders

With insurance rates already a major concern in Louisiana, overcharges like this only add to the frustration of homeowners trying to navigate a volatile market. Commissioner Temple’s office is actively investigating the situation, ensuring that policyholders receive every dollar they’re owed.

For those affected, the refunds offer some relief—but it also serves as a reminder to double-check your insurance statements and question any unexpected charges.