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Each year, insurance companies pay approximately $75 billion for losses incurred from damage due to fires, hurricanes, robberies, dog attacks, and other incidents involving property loss. In Louisiana, one major cause of loss is tropical storms. Locations near the Gulf Coast are vulnerable to damage from hurricanes have higher premiums than towns and cities located farther inland.
Louisiana home insurance can be expensive, but there are ways to minimize cost while still getting the protection you need. In this state, homeowners can choose from six types of policy packages. Each policy covers liability and property claims. Property claims are created when an individual suffers loss or damage to his or her home or personal belongings. Liability claims result from another person suffering harm on your property. In the worst case, liability claims may result in a lawsuit. A basic plan is the cheapest, while other plans generally cost more.
In storm-prone areas, choosing an insurance provider with special provisions for loss from hurricanes can save money. Due to the frequency of storms and their potential damage, some Louisiana insurance companies incorporate hurricane deductibles in their policies. This practice has increased in recent years. Hurricane deductibles can afford special financial benefits for loss incurred due to a tropical storm. For instance, a homeowner may purchase a 2 percent deductible that requires paying up to 2 percent of the home’s insured value, instead of a more costly deductible offered by most insurance plans. This type of insurance is best purchased long before a threat, however, as many companies restrict the sale of insurance when a hurricane or tropical storm is approaching. Keep in mind that Louisiana residents must purchase separate coverage for loss caused by flooding, surface water, water back-up in sewers and drains, earthquakes, nuclear damage, and warfare. This raises the cost of homeowners insurance, but it affords potentially critical protection in the event of an unforeseen disaster.
When selecting an insurance company, Louisiana residents should keep several considerations in mind to find the cheapest and most effective plan. First, shop around to find a policy that meets your specific property requirements and budget. Keep deductibles in mind, and remember that a higher deductible translates to higher out-of-pocket costs in the event of a disaster. Review your plan annually to ensure that you are only purchasing coverage that you need. A rule of thumb is to insure your home for at least 80 percent of its replacement value. Burglar-proofing your residence by installing anti-theft devices can cut premium costs, as can installing secondary locking devices. When determining insurance price, companies may evaluate factors such as the home’s condition, whether or not there is a pool, and even the types of pets you have. Taking simple preventative measures – such as installing smoke and heat detectors and keeping the house free of combustible materials – can greatly reduce the risk of loss prevention, and in turn save money on insurance costs.