Hurricanes, natural disasters to blame for increasing Louisiana homeowners’ insurance

Updated: May. 11, 2021 at 8:56 PM CDT
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NEW ORLEANS (WVUE) - After a call from her insurance agent, Maria Moreira had a frank conversation with her husband.

“I told my husband maybe it’s time we move out of New Orleans… I was really shocked it was like more than $1000 difference,” said Moreira.

Throughout the 2020 hurricane season Moreira says she never filed a claim with her insurance even after hurricane Zeta blew through the city. Faced with a much higher rate Moreira feared she’d have to take her kids out of schools they all love.

“It was just basically a headache to know you have to go through that and you don’t know it’s coming you don’t have claims you expect insurance to be less and it’s 40 percent more,” she said.

“A very active season with high losses in our state and elsewhere was not surprisingly going to cause reinsurance cost a spike this year and we are seeing that,” said Donelon.

Following the three named storms that dotted blue roofs across the state’s gulf coast, Louisiana’s insurance commissioner, Jim Donelon says this year bucks the insurance trend.

“If it held for the whole year I expect it would raise rates on average 12 percent... that’s a big change from the past five years were the cost of homeowners insurance increased only 1 percent per year each of the last five years,” said Donelon.

Donelson says hurricanes Laura, Delta, and Zeta carried a price tag of about $9.6 billion, which is why he says both large national and smaller regional carriers are carrying heftier reinsurance quotes this year. However, he says it is still a competitive market which may be a good thing for homeowners.

“So it really behooves people to shop their coverage if price is a priority for them,” said Donelon.

The future of those rates however also depends on the activity of this year’s hurricane season.

“Assuming we don’t have another year like last year I expect will return to the same stability that we had seen the five years before last year in the market,” said Donelon.

For now, Moreira says they will stay in New Orleans but only after spending some serious time on the phone. “I basically suffered a lot for three or four days but once I started getting calls in right away I got some quotes that were a couple hundred less and seems like I’m getting better even quotes right now,” said Moreira.

Donelon says across the country, the California wildfires and the Midwest derecho also drove up costs.

He says the only insurance company that does not insure Louisiana homeowners is Nationwide.

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