What Is Louisiana Citizens Insurance and How Does It Work?

Louisiana Citizens insurance is the state’s insurer of last resort — a nonprofit corporation created to sell property coverage to Louisiana residents and businesses that cannot find a policy on the private market. Formally the Louisiana Citizens Property Insurance Corporation (LCPIC), it writes homeowners and commercial property policies in two separate plans, charges premiums that are deliberately higher than private carriers by law, and can levy surcharges on nearly every property insurance policyholder in the state when a bad hurricane season blows a hole in its finances. That last point is why Citizens matters even to Louisianans who have never held one of its policies.

Who Can Get a Citizens Policy

Citizens is strictly a residual market. You qualify only if you cannot obtain basic property insurance through the voluntary private market.¹ You need an insurable interest in real or tangible personal property at a fixed Louisiana location, and you must show a good-faith effort to get coverage from private carriers first. The property itself has to be in insurable condition; LCPIC can decline applications for homes that are severely deteriorated. You can apply directly or through a licensed agent.

One boundary matters a lot in Louisiana: Citizens does not cover flood. Flood coverage requires a separate policy through the National Flood Insurance Program or a private flood insurer. If you own property exposed to both wind and water, a Citizens policy alone leaves the flood peril uncovered.

The Coastal Plan and the FAIR Plan

LCPIC runs two programs under one roof, and which one you fall under depends on where your property sits.

The Coastal Plan covers properties in designated coastal parishes. It traces back to 1970 and was folded into LCPIC at the corporation’s creation.²
The FAIR Plan covers properties outside the coastal zone. It serves owners who face private-market barriers for reasons other than hurricane exposure, including older construction, location in high-crime areas, or building features private underwriters won’t accept.¹

Both plans cover standard perils like windstorm, hail, and fire. Neither covers flood. The two plans are also separate financial accounts, which matters for the assessment system described below: a deficit in one plan doesn’t automatically trigger assessments tied to the other.

Why Citizens Premiums Are High by Design

Citizens is required by statute to be more expensive than private coverage. Rates for both plans must exceed by at least 10% the higher of two benchmarks: the actuarially justified rate, or the highest rate charged by qualifying private insurers writing in each parish.³ The LCPIC board sets rates annually and must include a catastrophe loading factor.

The 10% floor is intentional. If Citizens competed on price, homeowners would have no reason to leave for private coverage when it became available, and the corporation’s exposure would keep growing. If your Citizens premium feels punitive compared with what neighbors pay in the voluntary market, that gap is doing the job the statute wrote it to do.

Pricing on an individual policy still accounts for the usual variables: location, age, construction type, condition, and proximity to water. Properties in high-exposure coastal parishes carry the steepest premiums, and Citizens customers typically pay above even Louisiana’s already-elevated statewide baseline.

The Current Waiver of the 10% Loading

Starting January 1, 2025, LCPIC began waiving the statutory 10% surcharge on new policies and renewals. The waiver runs for three years.⁴ It applies automatically; you don’t need to request it. The underlying rate formula hasn’t changed, so the 10% comes back when the three-year window closes unless the legislature or the board extends it.

How Citizens Deficits Affect Every Louisiana Policyholder

This is the piece most homeowners don’t realize until a storm forces it into the news. When LCPIC runs a deficit after a catastrophe, the shortfall is not confined to Citizens customers. State law lets the corporation collect it from the broader property insurance market in two layers.

First, when the board projects a deficit in either plan, it exhausts profits and excess reserves. If the remaining deficit falls within 10% of the statewide direct written premium for the relevant lines from the prior year, LCPIC recovers it through regular assessments on participating insurers. When the deficit is larger, Citizens can issue revenue bonds and declare emergency assessments to service the debt. Insurers writing assessable property lines add the emergency assessment as a surcharge on their policyholders’ premiums and remit the money to the bond trustee.⁵

The practical consequence: a major hurricane season can add a percentage line item to your private homeowners premium for years, even if you’ve never had a Citizens policy. The 1.36% assessment levied after Hurricanes Katrina and Rita, triggered by more than $1.2 billion in LCPIC losses, ran for nearly two decades. It was originally scheduled to end in June 2026 but was retired early in April 2025 after the board determined it was no longer needed.⁴ The next big storm can start the cycle again.

Getting Out: The Depopulation Program

LCPIC actively tries to shrink. Through periodic depopulation rounds, private carriers can offer to assume blocks of Citizens policies, moving those customers back into the voluntary market.

Participating insurers must be admitted carriers with a Louisiana Certificate of Authority and must hold at least a B+ rating from A.M. Best or an equivalent. Their rates must be filed with and approved by the Department of Insurance before they can assume any policies, and during the first year after assumption those rates must comply with the same standards that govern Citizens itself.⁶

If your policy is picked up in a take-out round, you have real rights. No policy can be assumed without authorization from your agent of record. You can keep your current agent. And you can refuse the take-out and stay with Citizens; that right cannot be overridden by any depopulation plan or operating rule.⁶ Your agent is required to notify you of take-out offers, and the Department of Insurance has enforced that duty directly against agents who failed to pass along offers that would have saved their clients money.⁷

From your perspective the transition should be seamless: coverage continues, just under a new insurer’s name. If the take-out carrier’s rate is lower than your Citizens premium, you start saving immediately.

Filing a Claim

Report any loss to LCPIC as soon as you reasonably can. An adjuster will be assigned to inspect the damage and apply your policy. Louisiana law requires adjusters to treat claimants fairly, adjust claims strictly in accordance with the insurance contract, and produce truthful, unbiased reports.⁸ Photograph damage before any temporary repairs, keep every receipt, and keep a written log of your communications with the insurer. If a dispute develops, this file is what you’ll rely on.

Deadlines Citizens Must Meet

Louisiana imposes hard timelines on property insurers. Under normal conditions, the insurer must begin adjusting a property damage claim within 14 days after you report the loss. During a declared catastrophe the window extends to 30 days, with one possible 30-day extension. Once you submit satisfactory proof of loss, the insurer has 30 days to pay or make a written settlement offer.⁹

Penalties for Bad-Faith Delay

If the insurer fails to pay within 30 days of receiving satisfactory proof of loss and the failure is arbitrary, capricious, or without probable cause, the penalty is 50% of the amount owed or $1,000, whichever is greater, plus proven economic damages and reasonable attorney fees.⁹ Failing to begin adjusting the claim within the required 14 days carries a penalty of at least $5,000. These rules apply to every property insurer operating in Louisiana, Citizens included. A genuine disagreement over value is not bad faith; ignoring a claim, refusing to inspect, or stonewalling a policyholder who has submitted proper documentation can be.

If You Disagree With a Decision

Any Citizens-insured person aggrieved by an act, ruling, or decision of the governing committee can appeal to the Commissioner of Insurance within 30 days. If the commissioner’s decision doesn’t resolve the matter, you can demand a formal hearing under the Louisiana Insurance Code’s administrative procedures.¹⁰

You can also file a consumer complaint directly with the Louisiana Department of Insurance, which oversees LCPIC’s compliance, audits its financial practices and claims handling, and investigates complaints. For disputes involving bad-faith handling, the statutory penalties above give policyholders meaningful leverage in litigation. Louisiana law also entitles you to review and obtain copies of all documents relevant to your claim at no charge, and to submit additional evidence at any stage of the process.¹¹

If you hold a Citizens policy, review every take-out offer that comes your way; they often represent real savings and are the main route back into the private market. If you don’t hold a Citizens policy, remember that the corporation’s finances still touch yours — the next major storm season can bring new assessments onto premiums across the state.

1
Louisiana Citizens Property Insurance Corporation. Plan of Operation
2
Justia. Louisiana Code Title 22 Insurance – RS 22:2295
3
Louisiana State Legislature. RS 22:2303 – Rates
4
Louisiana Department of Insurance. Temple Announces Early End Date for Louisiana Citizens Assessment on All Property Insurance Policyholders
5
LA Citizens. Overview of Catastrophe Funding Sources and Assessments
6
Louisiana State Legislature. RS 22:2314 – Policy Take-Out Program
7
Claims Journal. Louisiana Commissioner Directs Agents to Notify Citizens Policyholders of Less Expensive Policy Offers
8
Louisiana State Legislature. RS 22:1674.1 – Standards of Conduct; Acknowledgment Required
9
Louisiana State Legislature. RS 22:1892 – Payment and Adjustment of Claims
10
Justia. Louisiana Revised Statutes 22:2331 – Appeal to the Commissioner; Appeal to the Court From the Commissioner
11
Louisiana State Legislature. RS 22:2401 – Requirements of Federal Laws and Regulations; Minimum Requirements