One of the most common questions I get asked by people thinking of investing in New Orleans is, “What’s the deal with insurance?” 

Here’s the deal. There are two main types of insurance that most people in New Orleans buy, flood and hazard. Flood insurance is the easy one. It’s a federal program and the rules and rates haven?t changed that much depending on what flood zone you?re in. The seller for a property can usually tell us the flood zone, and if he can’t, our insurance agent can. Depending on the area and the price of the home, flood insurance rates run anywhere from $300-1500 on a typical home.

If you will be buying a raised home, you can sometimes get that cost down by getting a flood elevation certificate that shows that your home is actually higher than the ground level that shows up in the flood maps.

Hazard insurance is the hard one. As far as I know, no insurance companies are writing new homeowners policies inside Orleans Parish, so if you buy a house today, you have to go with the state insurance agency of last resort, the inappropriately-named Citizens Fairplan.

It takes a little longer for your insurance agent to go through the Fairplan, about a week, and the cost is higher than market insurers. However, a good real estate agent and loan agent will let you know approximate costs ahead of time and these are just the new costs of buying a home today. Our interest rate is still low, but the insurance is a little higher. You win some, you lose some!

The great news now? Alpha Insurance, a local insurance agency, has put the estimated prices for insurance online so that everyone can look them up in advance to get an idea of what their costs will be!

They’re the only company that’s taken the time to make all this information open to the public, and it makes a big difference when you’re looking for a home to be able to access some real rates without waiting for a call back from an insurance agent. Check out my posting “Insurance Rates Open to the Public” for more information.