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Paul Murphy / Eyewitness News
Email: pmurphy@wwltv.com | Twitter: @pmurphywwl

NEWORLEANS-- It's a double whammy of sorts for Louisiana's 308,000 State Farm policy holders.

The company's homeowner insurance rates are up an average of 8.7 percent across the state, 9 percent in Orleans and Jefferson Parishes.

This is at a time when the company's hurricane deductibles have gone from 2 percent to 5 percent for most state farm customers.

Long time New Orleans area insurance broker Marc Eagan called the that type of jump in storm deductibles unusual.

'I don't see a lot of increases coming from the majority of the insurance market place with homeowners insurance raising deductibles,' said Eagan, president of the Eagan Insurance Agency. 'I don't think I've seen too many 2 percent to 5 percent jumps just across the board.'

At 2 percent, homeowners would have to come out of pocket $4,000 on a $200,000 home before the State Farm coverage kicks in. At 5 percent, the out of pocket cost sky-rockets to $10,000.

Under normal circumstances, insurance customers are supposed to see the price of insurance drop as deductibles increase. But, according to the Louisiana Department of Insurance, the increase is reflected in the new price of your State Farm policy.

'It would have been a 22 percent increase, approximately, instead of a 9 percent increase, if there hadn't been the reflection of the higher deductible,' said Lawrence Steinert, senior actuary at the Louisiana Department of Insurance. 'On account of the hurricane deductible increasing, that decreases the rate from what it would have been.'

Eagan said new wind modeling, showing potentially greater risk along the Louisiana coast could be to blame for higher insurance costs.

'The insurance companies see that and they don't want get overloaded in the lower area of the state, particularly closer to the Gulf of Mexico, Lake Pontchartrain with too many rooftops,' said Eagan. 'In order to eliminate some of that exposure, they try to raise deductibles, as we see in certain examples or increase premiums to try spread that load among various insurance companies.'

State Farm spokesman Gary Stephenson responded to our story with this statement:

'Our increase to a standard 5 percent Hurricane Deductible went into effect 12-1-2013 for renewals on and after that date. This deductible (specific to hurricanes/named storms) is built into our base premium. So when a person's premium charge is calculated, it includes a 5 percent Hurricane Deductible. If a person increased their standard (5 percent) Hurricane deductible to a 10 percent deductible, or higher, that would then result in a discount to the charge for that portion (hurricane portion), of their premium from a 17 percent to a 23 percent discount, or more, in most rating zones of the state.'

According to DOI, if policyholders want to know why their rates went up or what specific factors caused a change in their bill, they should call the Rating Division at the Louisiana Department of Insurance at 1-800-259-5300 with their policy in hand and our staff can audit their policy and tell them what accounted for the change in their premium.'

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