If you own a home in New Orleans not many homeowners know how much insurance they need on their homeowners insurance policy

There really are four different values to use on your policy and three of them are wrong

There is

• Market Value
• Loan Value
• Appraisal Value
• Replacement Cost

Market Value is the value of your home including land value and it is usually the listing price if you were to put your home on the market

This value will fluctuate with the current interest rate and recent home sales in your neighborhood

Loan Value is the amount you owe on your mortgage

Mortgage companies and banks don’t understand the insured value

They only want the coverage for the amount of the loan and don’t understand you can’t insure land because… well after a fire, hurricane or tornado…the land is still there

Appraisal value is completed by an appraiser to determine market value of properties just like yours

All three of these values should not be used to determine the insured value limit on your New Orleans homeowners insurance policy

The correct value is called Replacement Cost or Insured Value

The Replacement Cost is the amount for you to hire a contractor to rebuild your home minus the value of the land

It is usually determined by a cost per square foot figure

Some brick homes could be replaced for $125 – $150 price per square foot

If you have a 2500 square foot home and a contractor says new home construction costs are $140/sq ft your 2500 square foot home would cost $350,000 to rebuild

Some Common questions we get about the insured value on a New Orleans homeowners insurance policy limit

1. Why do I have to insure my house for that much? My home is worth much less.

It has nothing to do with the value of your home in the current real estate market

You can find a 1100 square foot home in the Irish Channel of New Orleans sell for $350,000 and you can find the same 1100 square foot home in another neighborhood in Kenner La 70065 sell for $150,000

The insured value is based off the Replacement Cost (cost to hire a contractor minus land value)

2. I only owe 75,000 on my mortgage. Can I just write a policy for 75,000?

No.  The replacement cost of your home has nothing to do with your loan balance. 

It is the cost to rebuild your home based on the total square feet of your house

And you can’t under insure a house because of the co-insurance penalty.

If you have a 3000 square foot two story home and you only want to write a policy for 150,000 it could be determined that you are under-insuring the home at 50%

300,000 replacement cost and you only want 150,000

that is 50% of the replacement cost so if there is a claim you would be penalized 50% deduction off the claim check

example) House burns down and you want a check for 150,000 but since you under-insured the property by 50% the insurance company would deduct 50% off of 150,000 and give you a check for $75,000

You would not be able to rebuild a 3000 square foot home for $75,000

If you would like a professional review of your insured value on your New Orleans homeowners policy to make sure you are not under-insured or over-insured you can give me a call Tim D’Angelo at 504.348.3131 or complete our quick for below

The list of homeowners insurance companies writing in New Orleans La is still growing each year

There was a time after Hurricane Katrina when maybe one insurance company was writing new homeowners insurance policies

but now the list is still growing…one good hurricane and this will change the trend

Insurance companies make money on homeowners insurance in New Orleans when the wind doesn’t blow

The current environment in New Orleans is still profitable to insurance companies from other states, mostly Florida, to enter the New Orleans Homeowners insurance market

Some insurance companies have unsustainable low rates in an attempt to grow their policy count 

This is a gamble that could pay off for you because if you get a policy that is below market rate and the wind doesn’t blow and the insurance company maintains their low rates for a few years….your savings could add up in the thousands $$$

If you go with an insurance company for an extremely low rate on New Orleans homeowners insurance and a hurricane strikes after year one you could be dropped or sustain a massive rate increase and be sent to the Louisiana Citizens Fair Plan because no other insurance companies are writing after a major weather event

Request a New Orleans Home Insurance Quote Proposal

Here is an example from the Louisiana Department of Insurance website 

2020 List of New Orleans Homeowners Insurance companies writing new policies in Louisiana

New $400K Home
Coverage Level: Dwelling is less than 1-year-old with brick veneer construction, 2800 square feet, $400,000 building coverage, $200,000 contents coverage, 2% hurricane deductible/$500 all other peril deductible, clean claims history, 710 credit score, no wind mitigation features beyond the Louisiana building code requirements for homes built after January 2007, and no multiline discount.

Access Home Ins Co (Preferred) $5472 

Access Home Ins Co (Standard) $6870 

Allied Trust Ins Co $2043

Allstate Indemnity Co $8175 

Allstate Ins Co $8941 

Allstate Vehicle and Property Ins Co $4741 

American National General Ins Co $9318 

Americas Ins Co $3728 

Anchor Specialty Ins Co $4211 

Armed Forces Ins Exchange $2364 

ASI Lloyds $2464 

Bankers Specialty Ins Co $3,479

Bankers Specialty Ins Co $4712 

Centauri National Ins Co (Elite-A program) $2716 

Centauri National Ins Co (Elite-C program) $2687

Centauri National Ins Co (Preferred program) $4377 

Centauri Specialty Ins Co $4377 

Encompass Indemnity Co $9256 

Encompass Ins Co of America $5230 

Encompass Property and Casualty Co $8305 

Excalibur National Ins Co $4812

Family Security Ins Co $3973

Federated National Ins Co $2547 

Gulf States Ins Co $2926

Gulfstream Property & Casualty Ins Co $7146 

Gulfstream Select Ins Co $7146 

Homesite Ins Co $5459 

Horace Mann Ins Co $5030 

La Citizens Property Ins Corp $7614

La Farm Bureau Casualty Ins Co $8833 

La Farm Bureau Mutual Ins Co $7362 

Liberty Ins Corporation $9436 

Liberty Mutual Fire Ins Co $6620 

Liberty Personal Ins Co $9436 

Lighthouse Property Ins Corp (Beacon) $3511 

Lighthouse Property Ins Corp (Standard) $5193 

Maison Ins Co $4447 

Metropolitan Prop and Cas Ins Co $2891 

Occidental Fire & Casualty of N.C. $3119

Progressive Property Ins Co $2464 

Safeco Ins Co of Oregon $6086 

Safepoint Ins $3546 

Service Ins Co $2495 

Southern Fidelity Ins Co $2355 

Spinnaker Ins Co $3569 

State Farm Fire & Casualty Co $3432 

The Automobile Ins Co of Hartford $6693 

The Travelers Indem Co of America $6477 

United Fire & Indemnity $7855 

United Property & Casualty $2322 

United Services Automobile Association $4029 

Unitrin Auto & Home Ins Co $4222 

Unitrin Safeguard Ins Co $1857 

USAA Casualty Ins Co $4033 

USAA General Indemnity Co $4366 

Request a New Orleans Home Insurance Quote Proposal

If you would like a quote comparison from multiple insurance companies from one insurance agency click here to get started or complete the quick form below

New Orleans La homeowners insurance guide

Understanding your wind deductible on your homeowners insurance policy.

There is no standard deductible on a homeowners insurance policy in Louisiana for wind damage.

Some companies offer a wind deductible.

Others offer a hurricane deductible and other policies may have a named storm deductible.

Three common deductible options issued on Louisiana Homeowners Insurance policies

• Wind or Hail Deductible
• Named Storm Deductible
• Hurricane Deductible

HOMEOWNERS INSURANCE DEDUCTIBLE TYPES

Wind Deductible

This deductible is applied to all wind and hail events regardless if caused by a named storm or hurricane. Just a windy day and a tree falls on your roof, the claim would be subject to the wind deductible.

The amount could be a value such as 1000, 2500 or a % of the insured amount.

Your policy might have a 1%, 2%, 3%, or 5% Wind deductible

Example)   200,000 house with a 2% wind deductible would result in a wind claim subject to a $4,000 deductible.  So a $4,000 deduction off of your claim check would apply to a wind loss.

Named Storm Deductible

This deductible applies when a weather event has been declared by the U.S. National Weather Service to be a tropical storm or a hurricane.

The force of wind must have been caused or resulted from the “Named Storm” event. Only when the storm is a given a name will the named storm deductible apply.

If you sustain just strong winds and there is damage to your house, your all other perils deductible would apply and not the named storm deductible.

This deductible is only triggered if damaged is sustained from a named tropical storm or a hurricane.

The most common Named Storm deductibles are 1%, 2%, 3% or 5%

Example)   200,000 house with a 3% named storm deductible would result in a wind claim subject to a $6,000 deductible as a result of a “Named Storm”

Hurricane Deductible

This deductible applies when a weather event has been declared by the U.S. National Weather Service to be a Hurricane only.

Deductibles usually range from 1%-5% as well and some companies depending on the location of your house will offer a flat deductible as low as 1000.

Example)  200,000 house with a 5% Hurricane Deductible would result in a wind claim subject to a $10,000 deductible as a result of a Hurricane claim.

If you have a Named Storm Deductible or a Hurricane Deductible and you sustain wind or hail damage not as a result of a Named Storm or Hurricane, your policy would be subject to the “All Other Perils” deductible which usually start at $500.

If your homeowners insurance policy has a hurricane deductible and your property sustains wind damage from a Tropical Storm, your claim check would not be subject to the Hurricane deductible deduction. Only the all other perils deductible would apply. 

It is best you check your home insurance policy and determine what type of  wind deductible you have.

This may not be an issue if you don’t live in a coastal area where wind damage is very common.

Hurricanes, tropical storms and hail damage are very common in Louisiana.

Depending on the type of wind deductible you have could determine the difference in you getting your roof replaced or basically self-insuring your roof out of your own pocket.

CHOOSING THE RIGHT DEDUCTIBLE FOR YOU

If you have a wind deductible, you should consider a policy with a named storm or a hurricane deductible.

Depending on the location of your house will determine the deductible options available to you.

You don’t have to wait until your policy expires to move to another homeowners insurance company offering a lower wind deductible in your area.

Some companies may also lure you in with a low wind deductible only to raise your deductible at renewal.

Something to consider is ask how long the insurance company has been writing in your area and how long they have been offering a low wind deductible.

Underwriting guidelines can change very quickly.

Rate stability and claims paying ability are key factors you need to consider when you are considering moving your homeowners insurance.

At this time if you have a 5% hurricane deductible, you should consider moving your homeowners insurance.

Unless you live in a coastal area such as Grand Isle or Lafitte, 

you should be able to get a much lower hurricane deductible.

If you need help when choosing your deductible, here is a guide to help you.

Home Insurance Deductible Guide: How to determine the correct deductible for your house

Understanding your deductible on your homeowners policy is important.

Examples of Deductibles on home insurance policies.

Here are some types of deductibles offered in South Louisiana

2%, 3% or 5% hurricane deductible

2%, 3% or 5% named storm deductible

2%, 3% or 5% wind/hail deductible

Let’s assume you have a quote for 250,000 dwelling amount on the proposal.

The home quote includes a 2% Hurricane deductible.

The Hurricane deductible is 2% of 250,000.

If you have to make a claim for damage as a result of a hurricane, your deductible will be $5,000.

The insurance company will deduct $5,000 from your homeowners insurance claim estimate.

Take a look at your insurance cover declarations page and determine the insured value of your policy and the % of your hurricane, named storm or wind/hail deductible.

Check your policy to determine not only the percentage % of your deductible but the type.

Does your neighbor have a tree that could fall on your house?

If you think your neighbor’s homeowners insurance policy will pay the damage to your house,  you are more than likely wrong.

If you have a high wind/hail or a named storm deductible and would like a low hurricane deductible, we have a variety of home insurance options for you.

Unless you live in a coastal area, you should not have a 5% hurricane, named storm or wind/hail deductible on your policy.