As more Louisianans get fortified roofs, debate emerges over size of insurance discounts

Hurricane Ida did a number on the roof of the St. Roch home that Sylvia Matthews rebuilt in 2010, years after Katrina tore it up.

Contractors replaced the roof, but it started leaking in every room of her house. After failing to track down the errant contractor while facing skyrocketing insurance costs, Matthews tried to tackle both problems at once: She got what's known as a fortified roof, with help from the nonprofit Rebuilding Together New Orleans.

State officials have hailed such roofs — built to specific hurricane-resistant standards — as perhaps the soundest long-term solution to Louisianans' insurance woes, since they should result in cheaper premiums. A program delivering $10,000 grants to homeowners is among the only proposals to date that addresses the risk underlying the state's climate-fueled insurance crisis.

But after getting the new roof, Matthews was disappointed to learn that her insurer, Cajun Underwriters Reciprocal Exchange, offers a discount of only 5% for fortified roofs, and that she would need much more expensive retrofits to save more. Most of the state's biggest insurers promise significant discounts, but the state doesn't require them. Matthews, like many homeowners, has been paying 25% more for insurance than she was before Ida.

"I'm on a fixed income," said Matthews, who plans to seek a higher discount with a different insurer. "I can't afford this."

In recent months, hundreds of homeowners have installed fortified roofs. But as the program starts to produce results, consumer advocates are asking whether Louisiana is doing enough to help customers land meaningful discounts, in turn building momentum for the program.

Records obtained by The Times-Picayune and The Advocate show the discounts offered by Louisiana insurers vary widely. An analysis of the filings from some of the state's top insurers show most offer a discount of between 15% and 30% on the wind and hail portion of the premium. That means the total premium would decrease by less, though in coastal areas, the wind and hail premium often comprises the vast majority of the policy.

Meanwhile, several of the few insurers that are actively writing new policies in south Louisiana, like CURE, offer discounts of only 5%, making it unlikely that homeowners would recoup the costs of a fortified roof.

"I don't think we're getting the most benefit from Fortified for single family homes," said Marjorianna Willman, executive director of the Louisiana Housing Corp., a state agency.

Legislation proposed

As of Friday, the state Department of Insurance had finished certifying the new roofs of 473 of the first 3,000 homeowners in the grant program. Another 109 are awaiting certification. In all, IBHS, which runs the program, says there are just over 1,500 fortified roofs in Louisiana, meaning most have been installed without grants.

Louisiana modeled its program after Alabama's, which has seen more than 40,000 homeowners put fortified roofs on their homes since 2017. More than 85% had no state help; they were incentivized instead by discounts from insurers and tax credits from the state.

But Louisiana lawmakers left out a major feature of Alabama's program: a discount requirement. According to the Alabama Department of Insurance, insurers must offer discounts of at least 20% on wind premiums for fortified roofs, with higher discounts for people living closer to the coast.

A bill sponsored by Sen. Royce Duplessis, D-New Orleans, would seek to bring Louisiana's program more in line with Alabama, mandating minimum discounts of 20%. The bill would also make nonprofits eligible for grants, helping address a concern that the program is tilted toward the wealthy.

But it's unclear how much support the bill will receive from the Republican supermajority in the Legislature. So far, the GOP has favored loosening regulations on insurers in hopes that more will enter the market, and that competition will reduce rates.

Insurance Commissioner Tim Temple supports the fortified roof program but is opposed to a mandated discount, part of a broader free-market philosophy.

Temple said he expects discounts to grow once insurers get more data on how fortified roofs perform.

"(Alabama's) insurance market is more stable than Louisiana's," he said. "We're in a fragile state. If you start benchmarking at a higher level than is actuarially justified, you're putting those companies in financial peril."

But consumer advocates want stronger homeowner protections and direct rate relief.

"This issue is the biggest thing facing the people of Louisiana," said Andreanecia Morris, head of HousingNOLA. "It's what they care about more than anything."

Affordable housing advocates also say that the state should put more money into the program. After allotting $30 million last year, enough for 3,000 homeowners, Temple requested half that amount this year. Lawmakers will decide whether to increase the amount in budget negotiations.

Key fix

Roofs are key to making insurance affordable because they make up a huge share of insured losses in hurricanes, which are intensifying as the world warms.

In the fortified program, run by the Institute for Building and Home Safety, roofers use better nails, tape seams in the deck underneath the shingles and make the edges of the roof stronger. An evaluator must certify it was done properly.

Fortified roofs are much less likely to need an expensive roof job after a storm.

Brian Keefer, CEO of Allied Trust Insurance, one of the few companies writing policies in south Louisiana, said most insurers in Louisiana won't even write a policy for anyone with a roof older than five years – though Allied will write for customers with up to 10-year-old roofs.

Allied offers a 20% discount on the wind portion of the policy for a fortified roof, which means that overall, customers in southern parishes see a roughly 17% discount, Keefer said.

"I will gladly provide a discount for our policies if I think there's less risk there. If you build a better roof that's going to (better) withstand weather, I can charge less. I'm happy to do that," Keefer said.

"The best long-term approach is mitigation."

Citizens, Louisiana's insurer of last resort, gives discounts for homeowners policies of 24% for Orleans Parish and most coastal areas outside of levee protection; 17% for most other populous parishes, including most of Jefferson and East Baton Rouge; and 7% for northern parishes.

But not all companies have decided to offer significant discounts yet.

Advocates say the state should mandate them, citing Alabama's success.

"The state should be doing everything reasonable to incentivize people to invest in the physical product so they may avoid having to make an insurance claim," said Kathy Laborde, president & CEO of Gulf Coast Housing Partnership. "What we are doing is not sustainable and the people are demonstrating it's not sustainable – they're leaving the state."

Kentrell Jones, executive director for East St. Tammany Habitat for Humanity, said that without significant discounts, the cost of installing a fortified roof can outweigh the benefit for low-income homeowners, who may need loans to cover installation costs.

"It's a stronger roof, it's making their home more resilient, but it's a financial strain because people are not getting the discount that they assumed they were getting," said Jones.

Keyonta Johnson, who received a new fortified roof on her Chalmette home through Rebuilding Together New Orleans, was glad to receive a $300 premium discount after submitting her certificate. When her policy comes up for renewal in May, she hopes she'll see another break.

But with a premium of $3,463 before the discount, she'll need a significant cut to make her insurance feel affordable. If she doesn't get one, she said she plans to start working part-time with UberEats or Amazon to keep up.

"I'm making it, but barely," said Johnson, a single mother who works at University Medical Center.

Marguerite Oestreicher, executive director of New Orleans Area Habitat for Humanity, said she's seen some significant discounts for homeowners with fortified roofs. But the more meaningful deals have gone to those with homes built to the Fortified Gold standard– which involves specific storm-proofing to various parts of the home.

The slow pace of discounting could owe to the program's relative newness, she said.

"We have to push and do a certain amount of educating," said Oestreicher.