Tens of thousands of home insurance policyholders in Louisiana will likely be scrambling for coverage after another major insurance provider announced it will stop renewing policies in the state starting in 2023.
There are roughly 36,000 Louisiana policyholders with United Property & Casualty Insurance Property. The company plans to leave Louisiana in the new year. It’s one of almost two dozen companies that have either become financially insolvent or left the state in recent months.
On Thursday, Louisiana Insurance Commissioner Jim Donelon joined Tommy Tucker on WWL-First News to discuss the large insurance void in the state. He specifically addressed the growing calls for the state of Louisiana to help policyholders who are facing steep increases or the possibility of having no insurance. Donelon cautioned against an increased reliance on the state as an insurer.
Donelon described how even well-intentioned plans to help lower the cost of home insurance policies in Florida have become unraveled. IN 2005, then Florida governor Charlie Crist pledged to bring down steep home insurance policies.
He made good on that pledge and Donelon said the rates of Florida’s version of citizens insurance was reduced by 25%. Citizens became the largest writer of insurance in Florida, according to Donelon.
Through a complex incentive program for reinsurance, Donelon said a fund was set up to pass along savings to policy holders. Over 15 years of relatively quiet hurricane seasons, that fund grew to more than $8 billion. Then Hurricane Ian hit in 2022.
Donelon says he was informed that fund has been wiped out and Florida is now running a deficit trying to recover from the latest hurricane. In light of what’s taken place in Florida, Donelon gave a blunt assessment about the state of Louisiana becoming a bigger player in insuring homes.
“We cannot afford to insure Louisiana as a state insurance program against hurricane losses. 800,000 claims in the last two years, payments to policyholders by private insurers: $23 billion” Donelon told Tommy Tucker.
Listen to the full conversation including Donelon’s take on what’s happening with the National Flood Insurance Program above.
