Louisiana’s insurance crisis worsens a year after Hurricane Ida
NEW ORLEANS (WVUE) - With many insurance companies failing or pulling out of the state, Louisiana’s insurer of last resort has taken on more than 100,000 additional policyholders in the year since Hurricane Ida.
Now, Louisiana Citizens is seeking approval for a 63 percent rate hike for residential properties in 2023.
“I’d kind of heard it through the grapevine that this was going to happen,” said David Clements, co-owner of Clements Insurance Services. “Unfortunately, this is justified.
“No one likes it. But Citizens -- by statute -- is required to be 10 percent higher than the actuarial rate for the leading insurance carriers in the state for homeowners’ insurance.”
Some insurance companies no longer are writing new wind and hail policies in parts of the state.
“Companies have simply stopped writing,” Clements said. “They haven’t all gone belly-up. Many have gone out of business and insolvent. But because (others) are continuing to stay in business, they’re just not writing new policies.”
Louisiana Insurance Commissioner Jim Donelon told Fox 8 on Monday night about an incentive package that is in the works.
Donelon said after Hurricane Katrina, then-Gov. Kathleen Blanco lured insurance companies back to Louisiana with money from the state.
“After Katrina and Rita, she put $100 million on the table from her anticipated surplus, experiencing surpluses from the rebuild after Katrina and Rita,” Donelon said. “It worked better than any of us had any expectation.”
Insurance costs also can affect homeowners’ monthly mortgage payments.
“That’s something that I’m really worried about,” Clements said. “I’m worried that if you combine the increased cost of people’s mortgages, because of insurance, that we’re going to run into a housing crisis.
“People have to be able to pay their notes and keep paying their mortgage monthly, in order to keep their homes. And that’s got to be the most important thing, to keep people in their homes.”
If Louisiana were to be spared this hurricane season, it could make a big difference.
“If we could get through another storm season, and finish out this storm season without getting beat up too bad, then we might see those rates creep back down,” Clements said.
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