BATON ROUGE, La. (WVUE) – State lawmakers introduced two bills Tuesday (Jan. 31) that brokers and insurance agents hope will improve Louisiana’s insurance landscape.
After hours of discussion, the House Appropriations Committee sent House Bills 1 and 2 to the full House of Representatives.
Kim Calloway of Louisiana Realtors testified before the committee on the second day of the special legislative session and explained how higher premiums affect home buyers.
“The cost and unavailability of property insurance is killing the real estate market,” Calloway said. “Your constituents may be able to buy, but they can’t afford to own, because of those costs.”
Lawmakers said even they are not immune to higher insurance rates and the effects of insurers failing financially after Hurricanes Laura and Ida. Rep. Tim Kerner (R-Lafitte) said his insurance premium has skyrocketed.
“My premium went from $6,000 to $18,000,” Kerner said, “and it’s happening all over South Louisiana. People can’t pay it. The only game in town is what you bring to the table today and we must do something.”
Insurance Commissioner Jim Donelon again urged lawmakers to put $45 million into an incentive fund to attract more insurers to the state.
“I truly believe that if we don’t do this, thousands of homeowners down I-10, I-12, are going to lose their homes,” Donelon said. “Turn the keys in, can’t afford the coverage.”
Donelon said eight insurers failed financially and some others stopped writing wind and hail policies after the 2020-21 hurricanes. The result was 125,000 customers who had to get policies from Louisiana Citizens, the state’s insurer of last resort.
HB 1 puts $45 million into the incentive fund, but also mandates that only insurers with a certain financial strength get the state grants.
HB 2 prohibits participation in the program by some companies.
The author of that bill – Rep. John Stefanski (R-Crowley) – said, “What I wanted to make sure didn’t happen is previous people who wrote homeowner insurance in the marketplace, who declared bankruptcy or (are) definitely insolvent, come back into the marketplace .”
Some Louisiana homeowners are still dealing with Hurricane Ida damage and insurance claims are still unpaid. Rep. Chris Turner (R-Ruston) asked Donelon about it.
“What penalties are we putting on these companies that are slowly rolling back existing claims?” Turner asked.
Donelon replied: “There are already many penalties in the law – two different sets of penalties in the law for slow claims.”
“What are they?” Turner asked.
“I don’t have it in front of me,” Donelon replied.
Donelon’s chief of staff, Denise Gardner, told the committee that at least 10 insurers have expressed interest in the proposed incentive program. Among those she mentioned were Allied Trust, Centauri Group, CURE (Cajun Underwriters Reciprocal Exchange), Elevate, Safe Point and Sure Choice.
The full House can take up the two bills on Wednesday.
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