LOUISIANA, USA — Delta, Zeta, Laura and Ida.
The hurricanes carved a path of destruction through Louisiana’s coastal parishes between 2020 and 2021.
The insurance industry paid out more than $18 billion in property claims in the wake of the powerful storms.
“We need companies writing policies here,” Sen. Kirk Talbot, R-River Ridge said. “We need competition. That’s the way to get premiums down and right now, companies just don’t want to come here. They don’t want to write here and the ones that are here, don’t want to keep writing here. They want to kind of phase out by attrition. “
At least 11 insurance companies that wrote homeowners policies in the state have gone insolvent. At least a dozen others have withdrawn from the state, either by canceling existing policies or announcing they won’t renew them.
Monday, state lawmakers started a week-long special session to consider putting $45 million into a newly created incentive fund aimed at luring insurance firms to the state.
Sen. Talbot is handling the legislation on the Senate floor.
“I heard seven, as many as nine companies that are kind of waiting in the wings for this program to be funded,” Talbot said.
The Louisiana Realtors Association called the incentive fund a good start but one that doesn’t guarantee affordable coverage for all real estate customers.
“We are seeing some significant challenges with the insurance and housing market because we have had so many insurers leave the state or become insolvent in the state, there are very few to write policies,” Kelli Starrett, New Orleans Metropolitan Association of Realtors CEO said.
That leaves a growing number of homeowners with only one choice, Citizens Insurance, the state’s insurer of last resort, at a much higher premium.
Starrett says lawmakers should also consider funding a “fortified roof” program.
“We saw this program take off in Alabama and also in Florida. It’s essentially a roof to the next level. It’s special nails and special tiles and shingles that are used to really lock the roof into the home in high wind situations like we see with hurricanes.”
Rep. Ray Garofalo, R-Chalmette said he would support an amendment to the insurance incentive bill if one is allowed.
“The fortified roofs program has been very successful in many areas, and I believe it will be successful here,” Garofalo said. “In fact, I’m considering funding it for my own roof at this point because I want to try and reduce my insurance rate, number one, but secondly I don’t want to lose my roof.”
Sen. Talbot says there would be plenty of safeguards baked into the insurance incentive fund.
“They’ll have to wait five years to get the full amount. If they pull out in year four or go insolvent or something like that in year three or year four, they get nothing.
The special session must end no later than Sunday, February 5.
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