Insurances woes in coastal Louisiana make hurricane recovery difficult (2022)

HOUMA, La. — The scars from last year's Hurricane Ida seem fresh – a strip mall grocery store is abandoned, its glass front knocked out; signposts and gas station awnings are ripped away; faded blue tarps cover buildings.

"The downtown area really took a beating," says Jonathan Foret, executive director of the South Louisiana Wetlands Discovery Center in Houma, a town of about 30,000 southwest of New Orleans. He points to boarded up historic storefronts and missing roofs.

Foret is surveying the lingering damage on a drive to see his insurance agent. He's among tens of thousands of Louisiana homeowners scrambling to find new property insurance in the midst of a new Atlantic hurricane season. Most major companies have quit covering the coast, and now smaller firms are going under after Louisiana was hit with two major hurricanes in the last two years.

Insurances woes in coastal Louisiana make hurricane recovery difficult (1)

/ Debbie Elliott/NPR

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Debbie Elliott/NPR

Foret says the insurance shakeup just exacerbates an already slow-going disaster recovery.

"It's actually had more of a compounding effect of driving by those things and seeing them broken and destroyed every day," he says. "It's become more depressing than I thought it would be."

His own home is still in need of repairs – a tarp covers his kitchen roof awaiting a contractor, which are hard to come by. Now he's trying to iron out this complication with his insurance agent, Tracee Bennett at La-Terre Insurance Agency.

(Video) Insurances woes in coastal Louisiana make hurricane recovery difficult

He hands her envelopes that have come from a new company, asking her if they're paid up. Bennett tells him his coverage is now with the state-run Louisiana Citizen's Property Insurance Corporation.

"We still have people with damage from Ida, so if you have an open claim or damage that you're still repairing, Citizen's is the only option that we have," she says.

Her office has been overwhelmed trying to help hundreds of clients like Foret who have either had their insurance companies go bankrupt or not renew policies on the coast.

"I've been in insurance since I can remember, and this is truly the low point of where I've seen it," Bennett says.

"It's a crisis," says Louisiana Insurance Commissioner Jim Donelon.

And one he says that's close to what happened in 2005 after Hurricanes Katrina and Rita devastated the state. Most major national firms quit offering wind insurance in South Louisiana back then. So the state turned to some 30 regional firms to fill the gap.

But after $22 billion in losses from Category 4 hurricanes Laura in 2020 and Ida last year, it was just too much for some companies to handle.

(Video) Coastal Louisiana struggles with housing crisis after Hurricane Ida

"Unfortunately, a half-dozen of those have now gone into receivership," Donelon says.

Even the insurance commissioner is not immune. Donelon and his wife are among the 140,000 property owners who lost their policies and had to find new coverage. He says about half of those policies were taken over by other firms. But the burden is falling to Citizen's — the state-run insurer of last resort.

"They're absorbing it, but it ain't pretty," he says. "They are being inundated."

He predicts Citizen's will have tripled its number of policies by the end of the year. And those government policies are more expensive than private insurers, whose rates have also increased. Adding to the pain, flood premiums through the National Flood Insurance Program are also going up.

Donelon says legislation passed earlier this year will require insurance companies to have more capital to operate in Louisiana, which should prevent another wave of liquidations. He says it's vital to both the state and national economies to have solvent companies willing and able to write policies here.

"Coastal Louisiana is burdened more than any other part of the country because we really do have a working coast," he says, pointing to oil and gas extraction, port activity, and the seafood industry.

"We have to support those folks," Donelon says. "I do believe that we can meet that challenge with the private sector although it will become expensive."

(Video) 7 Best Tips for Filing Insurance Claim After a Hurricane

Houma insurance agent Bennett says her customers are feeling the pain.

"I can tell you down here it has been crippling," she says. "It's daunting."

At minimum, the new coverage is adding a few hundred dollars to mortgages.

Houma is a mostly working-class town in Terrebonne Parish – a region threaded with bayous that lead to the Gulf of Mexico on its southern end. The median household income is about $45,000 a year compared to about $65,ooo for the nation, according to the U.S. Census Bureau.

Foret says that doesn't leave a lot of wiggle room to cope with the higher insurance costs, layered with inflation, the hurricane recovery, and the ongoing threat from climate change, which includes more frequent and intense hurricanes and rising sea levels.

"We're in it," says Foret. "Like we're in it in a way that it is going to prevent people from being able to live along the coast."

Climate migration is a politically loaded conversation. But it's been happening gradually with each catastrophic event. Foret has seen it in his own family. His father grew up in the Cocodrie community on the Gulf, then moved farther up Bayou Terrebone to the town of Chauvin when he married. Foret, now father to a toddler, has migrated even farther north to Houma.

"What if it's a part of our culture that we migrate away from the rising waters?" he asks.

You can see evidence of migration away from far south Terrebonne Parish, where schools and fire stations remain out of commission. Scores of homes are abandoned and look just like they did a week after Ida struck – roofs torn off and furniture scattered in the wreckage.

Alex Kolker, a professor at LUMCON, the Louisiana Universities Marine Consortium in Cocodrie, says the higher costs of clean-up, rebuilding and now insuring could transform these towns.

"I think it makes these areas much, much harder to live in and harder to have the kind of community where people would want to live," Kolker says. "So I think you look at the possibility of climate migration and people moving elsewhere."

Kolker says what's happening here should be a wake-up call.

"The real issue is it's not just a few isolated people in rural Terrebonne Parish," he says. "It's that this could be happening to so many people around the country in the not too distant future."

(Video) Bankrupt insurance companies halting Hurricane Ida rebuilding for many

Insurances woes in coastal Louisiana make hurricane recovery difficult (4)

/ Debbie Elliott/NPR

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Debbie Elliott/NPR

Fannie Celestine's experience after Hurricane Ida shows how people get displaced from their communities in a disaster. Her public housing apartment in Houma was condemned after Ida. She's 59 and lost just about all of her belongings.

"It's kind of hard to talk about it without crying," she says.

Because of a housing shortage near the coast, Celestine lived for months in a hotel 100 miles away in Lafayette before moving into a FEMA trailer closer to home. It's on an isolated gravel field away from town, with no public transportation. She doesn't have a car.

"It's a place to stay, but I'm from Houma," she says. "And I would like to go back to where I'm from."

She's tired of depending on relatives to get her to the doctor or shopping, and longs to get back to ordinary living.

"Like go the store and make groceries, or walk around in the mall," says Celestine. "That would mean a lot. But what can we do?"

Foret is also looking for a return to normalcy. And he spots a literal sign of it arriving on the back of a tractor-trailer rig.

(Video) Recovery pt. 2| Hurricane! Lessons Learned | Louisiana Public Square Special | 2009

"Look — it's a McDonald's sign," he says. "We can't get insurance but, look, they're replacing the golden arches."

After nearly a year of seeing a hurricane-mangled golden arches on the corner, this repair gives him a glimmer of hope that things will get better.

Copyright 2022 NPR. To see more, visit https://www.npr.org.

FAQs

Does homeowners insurance cover hurricane damage in Louisiana? ›

Coverage for wind damage is nearly always part of a homeowners insurance policy. However, in a hurricane-prone area like Louisiana, some homeowners policies may specifically exclude wind damage that occurs in conjunction with a hurricane.

Can you get hurricane insurance in Louisiana? ›

Louisiana is one of 19 states that allow insurance companies to charge something known as a “hurricane deductible.” With a hurricane deductible, you could be required to pay a substantially higher deductible before the insurance company will cover your damages.

What insurance companies are pulling out of Louisiana? ›

According to the office of the state insurance commissioner: Gulfstream Property and Casualty Insurance Company left in July 2021. Centauri Insurance took on the 9,000 Louisiana policies left uninsured by Gulfstream. State National Fire Insurance Company and Access Home Insurance Company both left in November 2021.

What is the hurricane deductible in Louisiana? ›

Louisiana Single Season Named-Storm Deductible

Named storm deductibles in Louisiana are typically between 2% and 10% of the Dwelling Coverage amount. The deductible is subtracted from the total amount of the claim to be paid.

How much does hurricane insurance cost in Louisiana? ›

The average price of NFIP flood insurance in Louisiana is $726 per year, though how much you'll pay may vary significantly based on the location of your home.

What should a home insurance adjuster not say? ›

What Should You Not Say To a Claims Adjuster? As already noted, do not say anything untrue to the property claim adjuster. It won't bode well if they uncover your deception. You should never admit any fault or even partial liability for what occurred.

How long does an insurance company have to settle a homeowners claim in Louisiana? ›

Insurance companies in Louisiana do not have a specific timeframe in which they must settle a claim after it is filed, but they are required to send the final payment within 30 days of a settlement being reached. Prior to that, they are only required to act “reasonably promptly.”

Is Allstate pulling out of Louisiana? ›

Allstate is dropping wind and hail coverage for nearly 20,000 policyholders in Louisiana next year, but the company has no plans to stop writing new homeowner policies in the state, an Allstate lawyer told commissioners before the vote.

Is Southern Fidelity Insurance company going out of business Louisiana? ›

NEW ORLEANS —

Southern Fidelity was the seventh insurance company to be declared insolvent in Louisiana. Back in June, the courts ordered liquidation and policyholders were given two weeks before their policies were canceled.

Is Southern Fidelity insurance pulling out of Louisiana? ›

Southern Fidelity cancels over 40,000 homeowners' insurance policies in Louisiana | Insurance Business America. Southern Fidelity Insurance Company has canceled the policies of 42,000 homeowners in Louisiana, leaving more customers to scramble for coverage before the storm season rolls in.

Does FEMA pay hurricane deductible? ›

ANSWER: FEMA does not cover insurance deductibles. However, if the insurance proceeds are insufficient to cover necessary expenses or serious needs, FEMA may be able to offer assistance. 14.

What is a good hurricane deductible? ›

Calculating Your Deductible

The typical hurricane deductible is between 1% and 5% of the home's insured value, although policies in some vulnerable coastal areas could have an even higher deductible.

Why is my hurricane deductible so high? ›

A hurricane, or named storm, deductible is applied separately from standard perils deductibles and is typically a higher dollar amount, meaning a policyholder would be responsible for a larger portion of any loss.

How much does hurricane insurance cost in Louisiana? ›

The average price of NFIP flood insurance in Louisiana is $726 per year, though how much you'll pay may vary significantly based on the location of your home.

Can you get hurricane insurance in New Orleans? ›

To be eligible for the New Orleans Hurricane Ida Insurance Deductible Program, an applicant must meet the following criteria: Sustained residential damage to your primary residence during Hurricane Ida; The primary residence is located within Orleans Parish; Household income is at or below 140% AMI; and.

Why is homeowners insurance so high in Louisiana? ›

Leaving so soon? Your custom quotes are just minutes away. Louisiana homeowners pay an average of $2,009 per year for homeowners insurance, which is 45% more than the national average. The high cost of home coverage in Louisiana is likely due to the increased risk of widespread storm damage.

Who is the largest insurer in Louisiana? ›

State Farm

Is wind insurance the same as hurricane insurance? ›

Whether you have just a homeowners policy or both a home and windstorm policy, the coverage will likely not be enough. With a hurricane comes both wind and water, but a windstorm policy will only cover you for wind.

Will FEMA pay my hurricane deductible? ›

Disaster assistance may include financial assistance for temporary lodging and home repairs, low-interest loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster. FEMA can't duplicate benefits from insurance or pay your deductible.

What should a home insurance adjuster not say? ›

What Should You Not Say To a Claims Adjuster? As already noted, do not say anything untrue to the property claim adjuster. It won't bode well if they uncover your deception. You should never admit any fault or even partial liability for what occurred.

How long does an insurance company have to settle a homeowners claim in Louisiana? ›

Insurance companies in Louisiana do not have a specific timeframe in which they must settle a claim after it is filed, but they are required to send the final payment within 30 days of a settlement being reached. Prior to that, they are only required to act “reasonably promptly.”

Videos

1. Risk | Hurricane! Lessons Learned | Louisiana Public Square Special | (2009)
(Louisiana Public Broadcasting)
2. Intro and Recovery pt. 1 | Hurricane! Lessons Learned | Louisiana Public Square Special | 2009
(Louisiana Public Broadcasting)
3. Hurricane Gustav: Aftermath & Recovery | September 2008 | Public Square
(Louisiana Public Broadcasting)
4. The National Flood Insurance Program: Critical Issues and Needed Reforms
(eesionline)
5. Flood Risk & Recovery Series: How to Prepare for Hurricane Season - Louisiana REALTORS®
(Louisiana REALTORS)
6. Leaving Louisiana | Louisiana Spotlight | 08/29/2022
(Louisiana Public Broadcasting)

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