Louisiana homeowners are still facing an insurance crisis. Will the Legislature respond?

A year after lawmakers agreed to a package of bills to make Louisiana friendlier to insurance companies, the ongoing home insurance crisis is prompting a host of legislators to seek more relief from spiraling costs for homeowners.

Lawmakers have filed bills to ramp up oversight of insurers, to crack down on what some see as "excessive" profits and to provide tax credits to people who pay high premiums, among an array of other ideas. Legislators have filed several dozen bills about property insurance in the session that begins April 14.

A key question remains: Will the GOP-dominated Legislature continue on the path championed by Insurance Commissioner Tim Temple, a Republican and former insurance executive who has pushed to make it easier for insurers to drop policyholders and raise rates?

Temple believes the strategy will attract more insurers to Louisiana and that the competition will drive rates down. He said several insurers are considering entering the market, while a handful have filed for rate decreases. He supports several proposed measures to boost building codes and strengthen fortified roof incentives, while he's continued to try to woo insurers with fewer regulations.

But the session comes as Gov. Jeff Landry and Temple are at odds over insurance issues, a rift that has grown since lawmakers convened last year. And there is growing disquiet among some lawmakers that insurance rates continue to rise for most of their constituents, years after a series of hurricanes threw the market into turmoil. Temple said in a recent interview that he has not "had the opportunity" to speak with Landry about insurance since last spring.

The governor has not championed a major package addressing property insurance. During a recent news conference on insurance costs, Landry focused almost entirely on auto insurance, though he again said he's frustrated that the package of industry-friendly bills he signed into law last year haven't resulted in major savings for homeowners. It was similar to the message he gave late last year, when he said he was open to supporting a different strategy on home insurance, such as legislation that requires insurers to provide certain levels of discounts in exchange for fortified roofs.

"We don't want to go down the road that Florida traveled, which is what we're hearing continuously echoed in this Capitol: If we believe everything the insurance companies tell us, we'll be just fine," Landry said last week.

'Top concern'

While much of the energy at the state Capitol is focused on high auto insurance rates, Louisiana homeowners are also being hit in the pocketbook by increasing homeowner's insurance rates. An analysis of rate filings from The Times-Picayune | The Advocate shows they have continued to climb since last year's laws were passed, and the average policyholder who experienced a rate change since then saw a 9% increase.

The rate hikes have threatened the ability for people to stay in their south Louisiana homes. In some coastal areas, communities are being ripped apart. Rising premiums have exacerbated shortages of affordable housing in metro areas. And the housing market has taken a hit in many south Louisiana markets.

"It is still a top concern of everyone," said Rep. Jacob Braud, a Belle Chasse Republican who filed a bill to allow homeowners to reduce coverage to only the unpaid principal balance of their mortgage, rather than having coverage on their home's full value. Doing so could lower their premiums but leave them with less protection during a hurricane.

"The rates are just so high. It might be the highest thing in their escrow, more than their house note," Braud said.

Louisiana voters have increasingly voiced concerns about rising home insurance costs since the state's insurance market tanked in 2022 and 2023.

John Couvillon, a pollster who works on behalf of many Republican elected officials, said his recent polling shows high property insurance costs are the No. 1 issue of concern in the state, particularly in south Louisiana.

Tricky problem

The Times-Picayune | The Advocate found in a series of stories on the crisis last year that homeowners in south Louisiana are being hit with staggering price increases, which in some cases are driving people out of their homes. Communities in coastal Louisiana are seeing an exodus of residents, hit with the double whammy of the insurance crisis and the aftermath of Hurricane Ida in 2021.

Finding quick solutions is not easy.

The state relies heavily on the global reinsurance industry, which backstops insurance companies and ultimately decides rates for homeowners. The California wildfires at the start of this year were another setback for the market, much of which is based in Bermuda.

That means Louisiana is, in many ways, at the whims of global catastrophes, which are becoming worse because of climate change.

But there are signs that reinsurance costs could be topping out after years of steep increases. A rate index kept by the reinsurance broker Guy Carpenter forecasts a slight drop in reinsurance costs in 2025 after years of steep hikes.

Some elected officials and advocates have begun pushing for a federal solution to homeowners insurance, which could work similarly to how the federal government underwrites flood insurance. But it is unlikely Congress will swiftly enact such a program.

Meanwhile, Louisiana is trying to incentivize large numbers of homeowners to build fortified roofs that are less likely to come off during a hurricane, which can provide premium discounts.

State Rep. Edmond Jordan, D-Baton Rouge, said he's preparing to file a bill that would require the state to back catastrophe bonds, which provide a backstop to insurers in the case of a major hurricane. He said the idea would help alleviate high reinsurance costs that are putting upward pressure on home insurance bills.

Jordan is also pushing a bill to give out tax credits for people paying high premiums. The measure would give homeowners a tax credit for the amount in home insurance premiums they pay over $3,000 a year. The amount of the credit would cap at $5,000.

"Hardworking families in Louisiana are still facing a crisis," Jordan said. "More of their income is going toward paying insurance than people in other states. If that's the case, they're entitled to some relief until we can fix it."

Staying the course

Temple and Republicans in the Legislature have enacted a series of changes to laws and regulations that make it easier for insurers to raise rates, drop policyholders and avoid costly lawsuits after hurricanes.

While premiums have not meaningfully dropped since then, Temple said he remains optimistic. He said several insurers are considering entering Louisiana's market, and noted that several companies filed for rate decreases this year. Rate filing data shows the vast majority of policyholders are not seeing significant rate declines, though some insurers have filed rate decreases for small groups of homeowners.

"We're trending in the right direction," Temple said.

Temple is supporting several bills on property insurance. One would require homeowners to sign a "satisfactory proof of loss" document when filing a claim, while others would require insurers to give more notice before canceling a policy. Much of his package is focused on auto insurance, part of a hotly contested debate between the insurance industry and trial lawyers over lawsuits filed after car accidents.

Battle brews

With home insurance costs still high, many lawmakers are pushing for a different approach.

Sen. Patrick Connick, R-Marrero, is pushing a bill to require insurers to report more information about their finances, including transactions with affiliates. The Times-Picayune | The Advocate last year found that 11 of the 12 companies that went insolvent in the wake of Hurricanes Laura and Ida sent hundreds of millions of premium dollars to less-regulated affiliates, making it difficult to say how much profit they were extracting from the insurance companies and whether they were spending money wisely.

"Everybody I know who has a house is fed up paying these high premiums," Connick said. "Where is the money going? They get no relief."

Landry threw his support behind an effort to give Temple more power to reject "excessive" rates from insurance companies. Sen. Jay Luneau, D-Alexandria, and Rep. Robby Carter, D-Amite, are sponsoring bills to do that.

"Our insurance commissioner has been unable to hold insurance companies to their word," Landry said. "I do not believe it is personal. I just believe he does not have the power to be able to do that."

Temple rejected the idea, saying in an interview that insurers do make significant profits in some years, but that they lost tremendous amounts of money after hurricanes in 2020 and 2021.

"To say insurance companies are making excessive profits is extremely disingenuous," Temple said. "I have the regulatory and legal authority to deny excessive rates."