Louisiana won’t have a special legislative session to deal with the state’s growing home insurance crisis, because Florida will start December 12but the governor John Bel Edwards and lawmakers believe they can take action now to trigger relief until the Legislative Assembly meets on its regular schedule April 10, 2023.
First: Place $20 million in the Secure Louisiana Fund to attract new private businesses to the state or induce existing businesses to expand the market for insuring their owners’ property here by offering subsidies.
“To me, what we need to do right now is fund the incentive program,” the Republican said. river ridge Sen. Kirk TalbotPresident of Senate Insurance CommitteeTold UNITED STATES Today Network this week.
Lawmakers believe they can do it after the Revenue Estimation Conference counts respendable income at its December meeting, which could be quickly followed by the approval of the Joint budget commission at its December meeting
“I think this is a crucial first step,” the Republican said. Lake Charles Sen. Jeremy Stine said during a recent Public Affairs Research Council online seminar.
Louisiana homeowners are facing dramatic increases in insurance costs triggered by the extensive damage caused by Hurricane Laura in 2020 and Hurricane Ida in 2021, whether from private insurers or citizen-sponsored l ‘State, designed as the insurer of last resort for homeowners who cannot secure protection in the private market.
“Our state is in a crisis comparable to or greater than (Hurricanes) Katrina and Rita in 2005,” the Republican Insurance Commissioner said. Jim Donelon said during the PAR webinar. “There is no exaggeration of the crisis. (Homeowners) are suffering greatly from the rate increases.”
In some cases, insurance bills exceed monthly mortgage payments.
Hurricanes Laura and Ida generated a total of 800,000 insurance claims totaling $22 billionleading to the bankruptcy of eight insurance companies and the cessation of other companies writing new business below Interstate 10forcing tens of thousands of homeowners to protect themselves through citizens, a dangerous trend.
The number of Citizens customers has almost quadrupled in the past two years to 128,000. By law, Citizens prices must be 10% above the highest market rate in each parish or the actuarial rate, depending on The highest.
“It’s at least as bad as after Katrina and Rita,” said Jeff Albrightgeneral manager of the Louisiana Independent Insurance Agents and Brokers. “This is the worst property insurance market in my 44 years in the industry.”
Donelon said that the Secure Louisiana Fund attracted five new property insurance companies to Louisiana after Hurricanes Katrina and Rita and thinks he might have similar success now.
Govt. John Bel Edwardswho met Lloyd’s of London insurance officials this fall to discuss louisiana crisis, says UNITED STATES Today, Network, his administration is working with Talbot, Donelon and others to identify legislation to strengthen the market. “We want to make the market more competitive, but not all solutions are obvious,” he said.
Talbot said he was already preparing for the spring legislative session.
“We need to do what we can to encourage companies to create new business, but we need a comprehensive plan to address the problem,” he said.
Talbot said he plans to introduce a bill for the spring session to require homeowners and homebuilders to meet “fortified roof” standards for new construction and replacements under legislation to strengthen building codes.
Consumers could offset some of the increased costs through a “Fortify houses“grant program that has been created but not yet funded. It is modeled after a similar program in Alabama.
Donelon said he would like to see the Legislature fund the Fortify houses program with $20 million used to provide grants of up to $5,000.
“These are some of the long-term solutions, but they will take time,” Talbot said.
Greg Hillburn covers state policy for the UNITED STATES TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1
