Rising insurance costs are not news. Insurance refunds are.
BATON ROUGE – Rising insurance costs are not news. Insurance refunds are.
Last year many individuals and institutions in Louisiana paid a special
surcharge on their property insurance. The assessment was to fund the
Louisiana Citizens Property Insurance Program. Churches were not spared
the surcharge. This year those individuals and institutions, including
most churches, who paid the special surcharges can get them back.
The Louisiana Citizens Property Insurance Corporation is a
state-sponsored nonprofit organization that provides property insurance
to individuals and institutions who cannot secure property insurance on
the open insurance market. These properties are usually “high-risk,”
such as those in coastal areas of the state.
As a result of Hurricanes Katrina and Rita, Louisiana Citizens
encountered $850 million in charges which created a significant
deficit. Louisiana Citizens then levied an assessment on each property
insurer doing business in Louisiana as allowed by state law.
Most insurance companies then passed on some or all of their assessment
to effected individual and commercial policy holders in the form of a
surcharge. The surcharges were listed as Louisiana Citizens FAIR
Plan Regular Assessment and/or Louisiana Citizens Coastal Plan Regular
Assessment on premium notices and policies.
Church Mutual Insurance, on of the largest church insurers in the
country, passed on to its effected customers the full 18.3 percent
surcharge of the property portion of their policies. GuideOne
Insurance, another large church insurer, passed on to its effected
customers an initial 10 percent surcharge. Thus far, the company has
absorbed the additional 8.3 percent of the surcharge themselves.
The surcharges for churches were unexpected. Churches paid from several
hundred dollars to many thousands of dollars. For example, Tioga
First Baptist in Pineville paid a little over $1,900 in surcharges.
At the special legislative session in December 2006, the Louisiana
legislature passed a bill that would refund the Louisiana Citizens
surcharges. The refund was made possible by the huge state budget
surplus. However, the refund is not automatic and will not come from
the insurance companies, but from the state.
Individuals who file state income tax forms will simply be able to
claim the insurance surcharges as a tax credit. They will list the
credit on Schedule F, Line 9 and attach a copy of their homeowner’s
insurance declaration page that shows the separate line item charges
for the Louisiana Citizens assessments.
Individuals who do not file state income tax forms must secure form
R-540INS from the Louisiana Department of Revenue to receive their
refund.
Churches do not file state income tax forms, but most of them will be
eligible for a refund. According to Tara Cunningham, Public Information
Director for the Louisiana Department of Revenue,
“The church MUST be a not-for-profit corporation registered with the
Secretary of State in order to obtain the refund.” Churches must file
form R-620INS and must provide a copy of their insurance declaration
page showing the surcharges.
Unincorporated churches will not be eligible for the refund.
All forms should be available after January 16 from the Louisiana
Department of Revenue’s statewide offices and from the Department’s
website at www.revenue.louisiana.gov.
David E. Cranford is pastor of Tioga First Baptist Church in Pineville.