Louisiana Citizens Insurance Faces Backlash Over Cancellation Refund Policy

State insurance commissioner defends changes as necessary to prevent "adverse selection"

Published on Feb. 11, 2026

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WDSU Investigates uncovered records showing Louisiana Citizens Property Insurance Corp., the state's insurer of last resort, has changed its policy on cancellation refunds, allowing the company to keep 80% or more of a homeowner's premium if they cancel their policy mid-term without qualifying for an exception. This has left some homeowners frustrated and questioning whether the policy amounts to "theft". The state insurance commissioner defended the changes as necessary to prevent "adverse selection" that could lead to higher premiums for remaining policyholders, but acknowledged the need for more transparency from Citizens.

Why it matters

Louisiana's insurance crisis, exacerbated by multiple hurricanes in recent years, has left many homeowners struggling to find affordable coverage. The changes to Citizens' cancellation refund policy are seen by some as further evidence of the challenges facing residents, potentially forcing them to choose between staying in the state or moving elsewhere due to unaffordable premiums.

The details

According to the records uncovered by WDSU Investigates, Louisiana Citizens Property Insurance Corp. changed its policy so that if a homeowner buys a one-year policy, has coverage during hurricane season, then cancels mid-term without qualifying for an exception, Citizens could keep 80% or more of the premium - potentially leaving the homeowner without coverage and out thousands of dollars. State Rep. Kyle Green said the policy "is not theft, but if there's another word for it, I would think that would be it." Citizens defended the change, saying it was implemented to reduce "adverse selection" that could lead to higher premiums for remaining policyholders.

  • In November 2024, the Louisiana Citizens Board of Directors unanimously approved the endorsement allowing the company to retain a larger portion of cancelled premiums.
  • The policy change was then submitted to and approved by the Louisiana Department of Insurance.

The players

Louisiana Citizens Property Insurance Corp.

The state-run insurer of last resort in Louisiana, which has faced financial challenges and high costs, particularly after Hurricane Katrina in 2005.

Tim Temple

The Louisiana Insurance Commissioner, who defended the changes to the cancellation refund policy as necessary to prevent "adverse selection" that could lead to higher premiums.

Kyle Green

A Louisiana state representative who criticized the Citizens policy change, saying it "is not theft, but if there's another word for it, I would think that would be it."

Aimee Freeman

A Louisiana state representative who graded insurance affordability in the state as a "D" and said there needs to be a bigger investment in the state's fortified roof program.

Ashley Nelson

A New Orleans homeowner who had her insurance policy cancelled after Hurricane Ida and was forced to turn to Citizens, facing high premiums.

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What they’re saying

“I am not going to call it theft, but if there's another word for it, I would think that would be it.”

— Kyle Green, State Representative (WDSU)

“Why? Just why? What is the basis? Explain to me what is the benefit of this policy. You are seeing more stories of people deciding to pack up and move to other places because living in south Louisiana has become unaffordable.”

— Kyle Green, State Representative (WDSU)

“Right now, if you do a fortified roof, it's kind of like a dart board. It's like, where will the darts land?”

— Aimee Freeman, State Representative (WDSU)

What’s next

The Louisiana Insurance Commissioner said he plans to have meetings in the near future with insurance agent associations to discuss the Citizens cancellation refund policy and ensure it is properly understood.

The takeaway

The changes to Louisiana Citizens' cancellation refund policy highlight the ongoing insurance crisis in the state, which has left many homeowners struggling to find affordable coverage. While the state insurance commissioner defends the policy as necessary to prevent adverse selection, the lack of transparency and the potential financial burden on policyholders has raised concerns about the fairness and long-term sustainability of the state's insurer of last resort.