“Along with the many legislative proposals we will make to strengthen the market during the regular session, these insurers will prove to the broader industry that Louisiana is a viable destination to do business on a going-forward basis.”
House Insurance Committee Chairman Mike Huffall has agreed to introduce a bill during the next regular session that will allocate additional funding for the program to help meet the full amount each company has requested and is eligible to receive.
Fix problems at the state level
The turnout can likely be seen as a positive sign, as realtors are experiencing some of the highest premiums in the country.
Louisiana has been experiencing the toughest property insurance market since 2005, when Hurricanes Katrina and Rita caused massive damage. Insured losses from the 2020 and 2021 hurricane seasons contributed to a mass exodus for insurers in the state, while inflation-related costs also proved troublesome.
The Louisiana Department of Insurance (LDI) has begun reviewing applications as they come in and will continue to do so over the coming days, according to a news conference.
Because of the rigorous criteria put in place to receive the grant, Donilon said, there will likely be many questions each insurer must address before recommending it for approval by the legislative committee.
Once the LDI receives approval from the Joint Legislative Committee for a budget, it will enter into cooperative endeavor agreements with interested companies and issue grants accordingly.
If all goes well, companies will be able to write policies as soon as next month, preparing state residents for the hurricane season, which typically begins on June 1.
What insurance companies have applied for grants from the Louisiana Incentive Program?
Nine insurance companies have applied for the Louisiana incentive program, seeking more than $62 million in total. they:
- Allied Trust Insurance – $6.5 million
- Applied Insurance – $10 million
- Cajun Underwriters Reciprocal Exchange (CURE) – $5 million
- Constitution Insurance Company – $10 million
- Elevate Reciprocal Exchange – $5 million
- Gulf States Insurance Company – $3.6 million
- Safe Point Insurance Company – $10 million
- SafePort Insurance Company – $2 million
- SureChoice Insurance Company Mutual Exchange (SURE) – $10 million
Advice for policyholders
LDI has recommended that policyholders do the following to ensure they receive a policy appropriate to their individual needs:
- Contact multiple agents, including captive and independent agents, to get as many quotes as possible for a new policy.
- Have an agent contact Citizens for a quote if you cannot find a policy in the private market.
- If you got a citizens’ policy, keep shopping for a new one as LDI expects more insurers to start writing this spring after implementing the Insure Louisiana Incentive program. If you cancel and rewrite your Citizens policy with a private company, Citizens will refund any unearned premium.
- If you have an open claim with UPC, that claim may or may not eventually be transferred to the Louisiana Insurance Guaranty Association (LIGA) for adjustment and payment. Continue to contact UPC about your claim unless notified that it has been submitted to LIGA.
Donilon took this opportunity to announce that after 17 years in his current position, he would not seek re-election and would retire from his career in politics. At 78 years old, Donelon is stepping down to “remove politics from the next vitally important legislative session in which many important issues dealing with the future of our state’s property insurance market will be discussed and hopefully decided to improve that market.”
“I have been in the service for nearly 50 years. I want to enjoy the remaining years of my life with my family, and I hope to enjoy some new hobbies.”
In other news
Louisiana Citizens, the state’s insurer of last resort, will provide an additional 30 days of support after United Property & Casualty Insurance (UPC) canceled insolvent policies on March 29 for policyholders and insurance agents, allowing them to obtain coverage in the private market or adhere to a citizens policy. Without losing coverage, it was announced earlier this week.