Louisiana is considering a $45 million plan to bring more insurance companies into the state
At least 11 insurance companies that wrote home insurance policies in the state have defaulted.
LOUISIANA, USA — Delta, Zeta, Laura and Ida.
The hurricanes carved a swath of destruction through Louisiana’s coastal communities between 2020 and 2021.
The insurance industry paid out more than $18 billion in property damage after the violent storms.
“We need companies to write policies here,” said Senator Kirk Talbot of R-River Ridge. “We need competition. That’s the way to lower premiums, and right now, companies just don’t want to come here. They don’t want to write here and those who are here don’t want to write any more here. They want to phase out through attrition. ”
At least 11 insurance companies that wrote home insurance policies in the state have defaulted. At least a dozen others have withdrawn from the state, either by canceling existing policies or by announcing they will not renew them.
On Monday, state lawmakers began a week-long special session to consider putting $45 million into a newly created stimulus fund aimed at attracting insurance companies to the state.
Senator Talbot handles legislation in the Senate.
“I’ve heard that seven or even nine companies are poised to fund this program,” Talbot said.
The Louisiana Realtors Association called the incentive fund a good start, but it doesn’t guarantee affordable coverage for all real estate clients.
“We are seeing some significant challenges in the insurance and housing markets because so many insurers have left the state or defaulted there that there are very few who can write policies,” said Kelli Starrett, CEO of the New Orleans Metropolitan Association of Realtors .
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.
According to Starrett, lawmakers should also consider funding a “fixed roof” program.
“We have seen this program started 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 anchor the roof to the house in high wind situations like we see in hurricanes.”
Rep. Ray Garofalo, R-Chalmette, said he would support an amendment to the Insurance Incentive Act if one is allowed.
“The fortified roof program has been very successful in many areas, and I believe it will be successful here,” Garofalo said. “In fact, I’m currently considering financing it for my own roof because I want to try and get my insurance rate down, number one, but second, I don’t want to lose my roof.”
Sen. Talbot says there would be many safeguards in the insurance stimulus funds.
“You have to wait five years to get the full amount. If they drop out in fourth year or go bankrupt in third or fourth year or whatever, they get nothing.
The special session must end no later than Sunday, February 5th.
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