The State Insurance Commissioner is scrambling to address the growing coverage crisis.
Last Friday, a staggering 42,000 Louisiana home insurance customers learned that their policies were not going to be renewing and that they had 60 days to find a new policy to ensure uninterrupted coverage.
This figure only adds to an already growing number of policyholders dropped by their insurers.
According to Louisiana Insurance Commissioner Jim Donelon, there have been six home insurance companies that have completely withdrawn from the state and there are another fifty that have ceased writing new policies below I-10 and I-12. This means that for most people, the only option available for homeowners’ policies is Louisiana Citizens, which is meant to be the insurer of last resort.
“As we get further away and hopefully go unscathed through this hurricane season, more of those companies will return to the market, I am certain, as it happened 15 years ago after Katrina and Rita,” said Donelon.
Some homeowners have until the end of August to find home insurance while others have until mid-September.
Customers with Southern Fidelity have been told that they have until September 13 to either find a new policy with a private insurer or to sign on with Citizens. That said Customers with Maison and Lighthouse have a much shorter deadline, as their coverage ends on August 28.
Signing with Citizens will provide retroactive coverage back to the day of the cancellation of the policy, which will ensure that homeowners don’t suffer a coverage gap as a result of the switch.
According to Donelon, Citizens has already watched its policy numbers skyrocket from 35,000 to 82,000. His current predictions are that it will soon reach 95,000.
The rapid influx of new applicants has already overwhelmed the system, which is comprised of only two computers. As a result, the policyholders who have been dropped are being given the additional time to register for coverage. Moreover, according to Donelon, one of the server’s capacities has been increased to help handle a larger load of consumers. This way, the goal is to make sure everyone has the home insurance coverage they need in time even if they were dropped by their insurer.
READER COMMENT: “I just confirmed with the DOI that customers do NOT have until 09/13 to find a new policy with a private insurer. This extension ONLY applied to persons obtaining a policy through LA Citizens. Coverage ended on 07/15/22.” By Kristy Kimble: https://www.facebook.com/Kimble-Insurance-Services-107633815032371