What Is Louisiana Citizens Property Insurance and Is It Good?

Louisiana Citizens Property Insurance Corporation is the state's insurer of last resort. It's not a government agency and it's not a traditional insurance company. It's a nonprofit entity created by the Louisiana Legislature to make sure homeowners can still get coverage when no private carrier will write them a policy.

If you're a homeowner in Louisiana, there's a good chance you've heard of Citizens. Maybe your agent put you there after your last carrier left the state. Maybe you landed there after a hurricane and haven't been able to get out. Or maybe you're just trying to figure out what it actually is.

Citizens is a safety net, but it comes with higher costs, a controversial cancellation penalty, and a hidden surcharge that affects every property owner in the state, even if you've never had a Citizens policy.

Here's what you need to know.

How Louisiana Citizens Property Insurance Works

Citizens was re-created in its current form by Act 1133 of the 2003 Louisiana Legislative Session. It runs two separate programs under one roof:

The FAIR Plan covers residential and commercial property statewide. This is the program most homeowners end up in. It provides standard homeowners policies (HO-3), dwelling fire policies for rental or investment properties, and commercial property coverage.

The Coastal Plan provides wind and hail coverage specifically for properties in coastal parishes. If you live along the coast and can't find wind coverage through a private carrier, this is the backstop.

Who qualifies for Citizens?

You can't just choose Citizens because you want to. You need at least one declination from a private carrier. Your agent documents the attempt, and that satisfies the eligibility requirement.

Citizens does not write auto, life, or flood insurance. It's property coverage only.

What Citizens costs

By design, Citizens is supposed to be more expensive than private market options. State law has historically required a 10% surcharge on all Citizens premiums to keep it from competing with private carriers. The logic is straightforward: if Citizens were cheaper, nobody would buy from private companies, and the whole market would collapse into one state-run pool.

That said, the 10% surcharge was waived for three years starting January 1, 2025, as part of Insurance Commissioner Tim Temple's reform package. That saves Citizens policyholders roughly 5% on their total bill. But even without the surcharge, Citizens premiums are steep.

In 2022, Citizens approved a 63% average rate increase for homeowners, with some parishes seeing hikes as high as 111%, according to Citizens' rate filings with the Louisiana Department of Insurance. Since Hurricane Ida in 2021, the average Citizens policyholder has seen their rates go up by roughly 164%, per LDI data.

For context, here's how Citizens grew during Louisiana's insurance crisis:

That tenfold jump from 2020 to 2023 tells the story. When 12 insurance companies went insolvent and another 24 left Louisiana between 2020 and 2022, tens of thousands of homeowners had nowhere else to go. Citizens went from covering around 34,500 policies to over 110,000 in just two years.

Citizens enrollment isn't spread evenly across the state. Coastal parishes like Cameron, Plaquemines, and Terrebonne have the highest concentration of Citizens policies because of the Coastal Plan's wind and hail coverage. Orleans Parish saw a major surge after multiple carriers pulled out of the New Orleans metro following Ida. The Baton Rouge area (East Baton Rouge Parish) saw steady growth as well, though the private market has been more active there. Lafayette and Shreveport have lower Citizens penetration since they're farther from the coast and the private market stayed more competitive in those areas.

The Cancellation Penalty You Should Know About

Citizens uses a minimum earned premium. If your policy was active during hurricane season (June 1 through November 30), Citizens considers 80% or more of your annual premium already earned, regardless of when you cancel. You don't get that money back.

The Citizens Board of Directors unanimously approved this as an "Earned Premium Endorsement" in November 2024, and the Louisiana Department of Insurance signed off on it. WDSU Investigates covered the change in February 2026, but it still isn't widely known.

The rationale from Citizens: without this penalty, homeowners could buy a policy before hurricane season, stay covered through the high-risk months, then cancel in the winter and get a pro-rata refund. That's called adverse selection, and it would push costs onto everyone who keeps their policy year-round.

The practical takeaway: if you're on Citizens and find private market coverage, think carefully about timing. Cancelling mid-term could mean losing thousands of dollars. Talk to your agent about the best time to make the switch.

Citizens Assessments: The Cost Every Louisiana Homeowner Pays

This is the part most people don't know about, and it affects you even if you've never had a Citizens policy.

When Citizens doesn't have enough money to pay claims after a major storm, state law gives it the power to levy assessments on the entire Louisiana property insurance market. Not just Citizens policyholders. Everyone.

There are two types:

Regular assessments kick in when Citizens runs a deficit for the year. They can charge up to 10% of the total industry premium for the affected lines of business. Your private insurance company pays Citizens, then passes that cost on to you through a surcharge on your bill.

Emergency assessments are the bigger deal. When deficits exceed what regular assessments can cover, Citizens issues bonds in the capital markets, then charges annual surcharges to all property policyholders in the state to pay off those bonds. Your insurer collects the surcharge from you and sends it to the bond trustee.

The Katrina and Rita assessment

After Hurricanes Katrina and Rita in 2005, Citizens issued $978 million in revenue assessment bonds. Starting in 2007, every property insurance policyholder in Louisiana paid a surcharge to cover that debt. The most recent rate was 1.36% of your premium, charged whether you were on Citizens or not.

The good news: in January 2025, the Citizens board voted to end this assessment effective April 1, 2025, about 14 months ahead of the original June 2026 payoff date. After nearly 20 years, that line item is finally gone.

The Liberty Mutual overcharging incident

In March 2025, the Louisiana Department of Insurance discovered that Liberty Mutual had been overcharging roughly 138,000 Louisiana policyholders for Citizens assessments for four years. The company failed to update the assessment percentage as it decreased, continuing to charge the old 2.49% rate instead of the current 1.36%. Liberty Mutual owes approximately $4 million in refunds.

If you had a Liberty Mutual homeowners policy between 2021 and 2025, you may be owed money. Check your premium statements or call your agent.

Why assessments matter going forward

The Katrina/Rita assessment is over, but the mechanism still exists. Another catastrophic hurricane season could trigger new assessments on every property policyholder in Louisiana. This is one of the real but often invisible costs of Citizens being the insurer of last resort. The state gets a backstop, but every homeowner shares the financial risk when things go wrong.

Tax tip: You can claim Citizens assessment amounts as a dollar-for-dollar credit against your Louisiana state income taxes. It's a credit, not just a deduction, so make sure your tax preparer knows about it.

How to Get Off Citizens and Back to the Private Market

Citizens was never meant to be permanent coverage. The goal, both for the state and for you, is to get back to a private carrier as soon as one will write your policy. There are two main paths.

The depopulation program

Citizens actively runs a program to move policyholders to private carriers. As of early 2026, they're on Round 23. Here's how it works:

1. Private carriers volunteer to participate and choose which Citizens policies they want to assume.
2. Citizens and the new carrier sign an assumption agreement.
3. You get two letters: one from the new carrier with your certificate of assumption, and one from Citizens confirming the transfer.
4. The new carrier takes over your coverage from the assumption date forward. Any claims before that date still go through Citizens.

On paper, the coverage should be the same or better, and the assuming carrier has generally agreed to match or beat Citizens' rates. In practice, it doesn't always work out that cleanly. The assuming carrier still has to underwrite your home, and they can decline to take the policy if the property doesn't meet their guidelines. An older roof, deferred maintenance, or other condition issues can all be reasons a depopulation offer falls through.

You don't have to accept the transfer. You can opt out within 90 days by having your agent submit a "Request to Continue Coverage" form. An opt-out form is also included with your assumption letter.

Working with an independent agent

Whether depopulation was offered and didn't work out, or it was never offered to you at all, an independent agent can shop the private market on your behalf at any time. Over the past two years, roughly a dozen new carriers have entered Louisiana's home insurance market, and each one has different underwriting guidelines. A home that one carrier won't touch might be a good fit for another.

An independent agent can:

• Check whether any of their carriers will write your property now, even if a depopulation carrier wouldn't
• Compare options across multiple carriers instead of waiting for a single depopulation offer
• Help you time a switch to avoid the earned premium penalty
• Monitor the market at each renewal to see if better options have opened up

The market is still tough in Louisiana. Rates are high, and not every home qualifies for private coverage. There are also common myths about what homeowners insurance covers that are worth clearing up before you switch. But the situation has improved since the worst of the crisis in 2022, and it's worth checking every year.

Is Citizens Good? The Honest Answer

Citizens fills a necessary gap, but it's designed to be temporary, not permanent. When carriers go insolvent and leave the state, when hurricanes damage thousands of homes in a single season, someone has to provide coverage. Without Citizens, many Louisiana homeowners would have no property insurance at all. Mortgage lenders require coverage, and going without it means risking your biggest financial investment with no safety net.

So yes, Citizens is good at what it was built to do.

But it's also designed to be a temporary solution, not a permanent one. The premiums are higher than the private market. The cancellation penalty can cost you thousands if you leave at the wrong time. And the assessment mechanism means every property owner in the state shares the financial risk when Citizens can't cover its losses.

If you're on Citizens right now, the best thing you can do is work with an agent who actively monitors the market and lets you know when a private carrier becomes an option for your property. The goal isn't just to get off Citizens. It's to get the right coverage at a better price, on your timeline, without losing money to penalties.

Louisiana's insurance market has been through a lot since 2020. Carriers leaving, rates skyrocketing, homeowners wondering why their premiums keep climbing. Citizens was the safety net that caught tens of thousands of families during the worst of it. But a safety net works best when you don't have to stay in it forever.

If you're on Citizens and wondering whether you have options, we can check for you. No pressure, no obligation. Just an honest look at what's available for your home right now.