Louisiana state leaders are looking to temporarily address the region’s problematic property insurance market with a short special session today.
The special session will revolve around the Insure Louisiana Incentive Program, which was passed unanimously by legislators in 2022. The legislators will vote over a $45 million fund for the program, which will be used to provide matching grants to insurers who write new business in Louisiana.
“It is critical that we fund this program, which will save Louisianans money on their homeowners insurance,” said Louisiana Insurance Commissioner Jim Donelon in a statement released last week. “I’ve spoken to too many of our state's residents and business owners, struggling to make ends meet, who are now seeing skyrocketing insurance costs. Some are facing being priced out of their homes. My number one priority is stopping that from happening and keeping people in their homes.”
Donelon was instrumental in calling the special session, by addressing members of the Legislature in a written statement issued January 19, 2023. In that statement, the commissioner explained that Louisiana is experiencing “the worst homeowners insurance market” that it has seen since hurricanes Katrina and Rita.” In the aftermath of the more recent hurricanes Laura, Delta, Zeta and Ida, eight insurers financially failed, while many more insurers temporarily stopped writing new policies, Donelon added.
The insurance commissioner had also indicated that seven insurance companies have expressed interest in the proposed incentive fund – five are already licensed in the state, while the two others are awaiting their license to operate, which can be resolved in short order, the official said.
NOLA.com reported that the $45 million would come from the $925 million in extra revenue that Louisiana is expected to collect this fiscal year.
There is some pushback to the fund; the Louisiana Realtors Association had commented that while the fund is a “good start,” it does not address the underlying issues that led to affordability issues in Louisiana’s property insurance market.
"We are in crisis mode as it relates to getting good, affordable coverage for all real estate customers," said Louisiana Realtors Association CEO Norman Morris, as reported by NOLA.com.
