Total Insurance Losses From Hurricanes Laura, Ida Now Over $20B
Advocate, The (Baton Rouge, LA)
Apr. 25—Hurricanes Laura and Ida has resulted in over $20 billion in insurance losses, insurance commissioner Jim Donelon said.
Speaking with Jan Swift on the Discover Lafayette podcast, Donelon said some insurers in Louisiana have gone bust as a result. Fortunately, the Louisiana Insurance Guaranty Association is in place to protect property and casualty policyholders with recovery from LIGA is capped at $500,000 per person and $500,000 per occurrence.
Listen to their conversation here.
Donelon, a 20-year lawmaker before being elected insurance commissioner, looked back to the days of Gov. Kathleen Blanco as an example of how the state worked to keep private insurers afloat in the aftermath of massive claims following hurricanes Katrina and Rita.
Without these private insurers, he said, the state would have to become the insurer for all levels of risk, not just those that are currently covered by the Louisiana Citizens Property Insurance Company (which covers those unable to get private insurance due to special circumstances). Working to create incentives to attract companies to Louisiana after many carriers left, Blanco also worked to have the first statewide building code enacted to ensure that structures were built more able to "weather the storms."
Donelon also noted that the cost of auto insurance in Louisiana is the highest in the nation. While the state's uninsured rate is comparable to other states at 12-14%, the claims-to-litigation ratio is to blame.
"We are far and away the most litigious state of the 50 states in the number of claims that end up in litigation," he said. "That litigation cost is the outlier of our system versus the other 49 states."
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