Why Liberty Mutual customers in Louisiana will get homeowner’s insurance refund

by Greg LaRose, Louisiana Illuminator
March 7, 2025

Some 138,000 Louisiana customers of Liberty Mutual can expect a small refund on their homeowner’s insurance after the company overcharged them for the past four years, according to the state insurance department.

Insurance Commissioner Tim Temple said the policyholders were billed too much for an assessment that every homeowner pays to fund the Louisiana Citizens Property Insurance Corp., which covers property owners who cannot get policies on the private market.

The overcharges total approximately $4 million. The error occurred because Liberty Mutual has failed to make annual adjustments to the assessment since 2021, when it charged policyholders 2.49% of their premium to support Louisiana Citizens. The surcharge should have decreased every year, bringing the rate to 1.36% for this year, Deputy Insurance Commissioner John Ford said.     

The mistake came to light in February when the Louisiana Department of Insurance said it received a consumer complaint about the Louisiana Citizens assessment charged on their Liberty Mutual renewal notice. Temple said the company has acknowledged its error, and his agency will monitor repayments to ensure customers are refunded.

“We regret the error, and we are working closely with the Louisiana Department of Insurance on a plan to refund impacted customers as quickly as possible,” a Liberty Mutual spokesperson said in an email to the Illuminator. 

The amount of refunds will depend on the customer’s total premium and the difference between 2.49% and what they should have been assessed on their bills. For example, a customer paying a $4,000 homeowner’s insurance premium paid a $100 Citizens assessment last year based on the 2.49% rate, when they should have been charged $68 for a 1.7% rate. Their refund for 2024 would be $32.

The correct assessment rates for 2022 and 2023 were 2.4% and 2.1%, respectively.

The insurance department is determining whether any regulatory action against Liberty Mutual is warranted and whether any other insurers have made a similar mistake, though its news release said the overcharge appears to be an isolated incident.   

The Louisiana Citizens assessment has been placed on homeowners insurance bills since 2005 to help the state pay off borrowing to cover damage claims that followed hurricanes Katrina and Rita. The assessment rate has been gradually lowered over the years and will end entirely next month.

Liberty Mutual will adjust its assessment charge to 0% effective April 1, according to the insurance department. State officials are directing policyholders with questions to contact the company or their agent.

Louisiana Illuminator is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Louisiana Illuminator maintains editorial independence. Contact Editor Greg LaRose for questions: info@lailluminator.com.

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