Thousands of people in the South no longer have insurance as companies are leaving the region after years of devastating storms.
Thousands of people in the South no longer have home insurance because companies are leaving the area after years of devastating storms.
The state of Louisiana is at the center of this insurance dilemma.
In the past two years, more than 20 companies have gone bankrupt or withdrawn from the state, forcing hundreds of thousands of families to pay higher premiums or go without coverage.
“We are certainly in a crisis,” said Louisiana Insurance Commissioner Jim Donelon.
While Louisiana had a quiet hurricane season last year, some families are still rebuilding after deadly tornadoes ripped through the state last month. (Fox News / Fox News)
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Donelon says the crisis began in 2020 when Hurricane Laura hit Lake Charles. Soon after, the state was hit by storms Delta and Zeta, and then another major hurricane, Ida, in 2021.
“800,000 claims were filed after Laura and Ida, resulting in insurers paying $23 billion in insured losses,” Donelon said.
But it’s not just the harsh weather in Louisiana that drives prices up. Donelon explains that unprecedented natural disasters around the world are having an impact.
“Our regional industry is supported by the international reinsurance market and that market has been affected not only by our horrible hurricane seasons, but also by Hurricane Ian in South Florida last year, unprecedented wildfires in California and Australia and record flooding in Germany, Donelón said, “All of those challenges are making insurance much harder to come by and more expensive for policyholders in the coastal parts of our state.”
Today, the average home insurance premium in Louisiana is over $2,000 a year. That’s 46% higher than the national average. As businesses withdraw from the state or suspend underwriting new businesses, people are forced to purchase policies through the state’s “insurer of last resort,” Louisiana Citizens Property Insurance. Prices for citizens are rising this year with premiums averaging around $5,000 in at least seven parishes. By law, Citizens sets its prices above market rates, so the state doesn’t compete with insurance companies.
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The walls of a house completely leveled after a tornado ripped through Marrero, Louisiana. (Fox News / Fox News)
“We don’t want to put the state in the insurance business,” Donelon said.
While Louisiana had a quiet hurricane season last year, some families are still reeling from deadly tornadoes.
Just days before Christmas, 21 tornadoes touched down across the state, many in rural communities.
Gail Bradley, of Killona, was one of dozens injured during the storms. Her sister, Charlotte Lewis, says she is still on the mend.
“She was stuck in her entertainment center for about 30 minutes, screaming and petrified, trying to get someone to come help her,” Lewis said.
Fortunately, help arrived, but now Bradley is on her own to repair up to $60,000 worth of damage. Lewis says that after Hurricane Ida, homeowners insurance became too expensive for her sister.
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Charlotte Lewis says that her sister just had her house repaired after Hurricane Ida. Now they are preparing to tear it down after a tornado hit her neighborhood last month. (Fox News / Fox News)
“She’s a retired person on a fixed income,” Lewis said. “She can’t afford it to get the insurance and when she tried there was no one here to accept it, they all left.”
Now the family is trying to do everything they can to clean up Bradley’s property, so he can go home.
“I don’t want my sister to come home and see this mess,” Lewis said. “We want to tear the house down because if she sees it like that, I know she’s going to crush her.”
The state is working on various solutions to the insurance crisis. Donelon says one solution the state is hoping for is more of a quick fix: an insurance incentive program that would offer millions of dollars in grants to companies that commit to doing business in Louisiana.
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“We did this after Hurricane Katrina, and it was very successful in attracting new companies to do business in our state,” Donelon said.
In the long term, the state also offers homeowners grants to strengthen the roofs of their homes, through the Louisiana Fortify Homes program. The State of Alabama established a similar program in 2011 and has helped more than 3,000 families better protect their home over the past decade.