Louisiana residents facing growing crisis over insurance

Thousands of Louisiana homeowners could be homeless if the Legislature doesn't implement an incentive fund to attract companies to write new insurance policies during an escalating crisis triggered by four hurricanes since 2020.

The House Appropriations Committee advanced a bill Tuesday to inject $45 million into the Insure Louisiana Fund in state surplus dollars after pleas from Republican Insurance Commissioner Jim Donelon, Republican Lafitte Rep. Timothy Kerner and industry advocates.

"People in South Louisiana are suffering and this is the only game we have," said Kerner, who said his insurance premium increased from $6,000 to $18,000.

"Their insurance bills are bigger than their mortgage payments and people are going to be homeless."

"This is what I consider to be the crisis of my 16-year tenure as commissioner," Donelon said. "Every day someone is telling me they're on the verge (of losing homes). I truly believe if we don't do this thousands of homeowners will lose their homes - turn in their keys."

The Legislature is in the midst of a weeklong Special Session to address the crisis of property insurance availability and affordability.

Lawmakers are limited to considering a single bill to implement the fund as an emergency measure, hoping millions offered in industry grants will attract private companies to offer property insurance policies and remove customers from Citizens, the state-sponsored insurer of last resort.

The number of customers in Citizens has quadrupled during the past two years to 125,000. By law, Citizens' prices must be 10% above the highest market rate in each parish or the actuarial rate, whichever is higher. Citizens just implemented a 63% rate hike this year.

Donelon said at least seven insurance companies have expressed strong interest in the program if it's funded. He noted the program has proved effective before when it was first implemented following Hurricane Katrina.

"This bill will replicate what we did very successfully (after Katrina)," he said.

Jeff Albright, chief executive of the Independent Insurance Agents & Brokers of Louisiana, said he believes the program will work if funded.

"It's all about bringing in more market capacity," Albright said. "I believe you'll see good movement of these policies out of Citizens to private carriers."

But some lawmakers, especially those in northern Louisiana, remain skeptical.

"Most folks where I live who talk to me don't like the program or don't understand it," said Rep. Francis Thompson, D-Delhi. "Is this going to be a fix?"

Donelon said more permanent changes are needed that can be addressed in the Regular Session beginning April 10, but the incentive fund will provide immediate relief.

"This is not a silver bullet, but I do believe it will be more than a Band-Aid," he said. "I would call it a tourniquet."