Editor’s Note: This article has been updated since its original publication to include a statement from Insurance Commissioner Tim Temple.
Tropical Storm Francine seems to have its sights set firmly on Louisiana, and that could spell trouble for the state’s ongoing property insurance crisis.
Over the past few years, multiple insurers in Louisiana have either gone bankrupt or left the state in the wake of catastrophic property damage caused by hurricanes like Laura, Delta and Ida.
A deluge of claims coupled with the increased cost of reinsurance has left homeowners facing limited coverage options and skyrocketing premiums. Many have been forced to turn to Louisiana Citizens, the state-run insurer of last resort, which itself is under pressure due to its high volume of policies.
LSU’s 2023 Louisiana Survey found that, in 2022, 17% of homeowners had their policies canceled; 55% of homeowners who tried to obtain a policy had difficulty obtaining one; and 63% of homeowners saw the cost of their coverage increase.
If the worst should come to pass and Francine does cause widespread property damage in Louisiana, it stands to reason that the state could see further contraction in its property insurance market, though it should be noted that Louisiana lawmakers have implemented incentive programs to attract insurers back to the state.
While it’s currently unclear the exact impact Francine will have on property insurance rates, Insurance Commissioner Tim Temple in a statement sent to Daily Report says the Department of Insurance is working diligently to avoid any negative outcomes.
“My office has been in constant contact with insurers doing business in Louisiana to make sure they are prepared and know our expectations for responding to events like Hurricane Francine,” Temple says. “In light of those efforts, as well as our increased solvency reviews and the property insurance reform we passed this session, I believe we have a strong foundation for successfully responding to this hurricane and for maintaining our progress on making Louisiana a good place for companies to do business.”
Temple on Monday issued a statement urging homeowners to “be insurance-ready” ahead of the storm’s landfall in addition to preparing their properties.
“Review your policy, discuss potential out-of-pocket costs with your agent and keep their information handy in case you need to file a claim,” Temple says.
