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State insurance crisis ‘can’t be overstated’ – InsuranceNewsNet

“I think this is a critical first step,” Republican Lake Charles Sen. Jeremy Stine said during a recent Public Affairs Research Council webinar.

Louisiana Homeowners are facing dramatic insurance cost increases caused by the heavy damage caused by Hurricane Laura in 2020 and Hurricane Ida in 2021, either from private insurers or the state-sponsored Citizens, designed as the insurer of last resort for homeowners who cannot sure not. protection in the private market.

“Our state is in a crisis comparable to or greater than (Hurricanes) Katrina and Rita in 2005,” Republican Insurance Commissioner Jim Donelon said during the PAR webinar. “There is no overstating the crisis. (Homeowners) are suffering enormously from rate increases.”

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In some cases, insurance bills exceed monthly mortgage payments.

Hurricanes Laura and Ida produced a total of 800,000 insurance claims $22 billioncausing eight insurance companies to fail and other companies to stop writing new business below Interstate 10forcing tens of thousands of homeowners to secure protection by Citizens, a dangerous trend.

The number of customers in Citizens has almost quadrupled in the past two years to 128,000. By law, Citizens’ prices must be 10% above the highest market rate in each municipality or the actuarial rate, whichever is higher.

“It’s at least as bad as it was after Katrina and Rita,” said Jeff Albrightchief executive of the Louisiana Independent Insurance Agents and Brokers. “This is the worst property insurance market in my 44 years in the business.”

Donelon said the Insure Louisiana Fund attracted five new property insurance companies Louisiana after hurricanes Katrina and Rita and believes it can now have similar success.

Gov. John Bell Edwardswho met with Lloyd’s of London insurance officers to discuss this fall of Louisiana crisis, tell USA Today, Network his administration is working with Talbot, Donelon and others to identify legislation to strengthen the market. “We want to make the market more competitive, but all the solutions are not obvious,” he said.

Talbot said he is already preparing for the spring legislative session.

“We have to do what we can to encourage companies to write new cases, but we need a comprehensive plan to solve the problem,” he said.

Talbot said he plans to introduce a bill for the spring session to require homeowners and homebuilders to meet “reinforced roof” standards for new construction and replacement as part of legislation to strengthen building codes.

Consumers can offset some of the increased costs through a “Strengthen houses” grant program that has been created but not yet funded. It is modeled after a similar program in Alabama.

Donelon said he would like to see the Legislature pass the Strengthen houses program with $20 million used to make allowances of up to $5,000.

“These are some of the long-term solutions, but it will take time,” said Talbot.

Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1

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