The state has reached a crisis point in its property coverage market with prices headed steadily skyward.
Families affected by the hurricanes that have hit the state in many years have already been facing rapidly climbing home insurance rates, but at the same time, they’re also battling with insurers to pay for the costs they’ve paid to make their homes livable again.
Insurers in the state have gone bankrupt, leaving policyholders floundering
While settlements from some home insurance companies are protected through the state-backed guaranty association, the process can take longer for policyholders to receive their owed money, and they don’t tend to receive as much as their claims would have paid out if their insurer had remained solvent.
This means that many families have had to pay more out of pocket to make their homes livable again, while simultaneously paying premiums many times higher than they were before the damage occurred.
After all, some hurricane victims – like thousands of others throughout the state – have found themselves leaning on the insurer of last resort, Citizens, which charges more for coverage than insurers on the private market. That said, even those who can find coverage with a private insurer aren’t saving all that much.
The home insurance crisis has been getting worse, with no sign of relief
Louisiana has been facing a property coverage crisis for quite some time, with the situation coming to a head within the last couple of years. That said, despite debates going on in the Legislature over a slew of proposals to overcome the crisis, there doesn’t appear to be any end in sight.
Last week, a proposal intended to provide immediate aid, such as through a reduction in the 10 percent surcharge added to all Citizens premiums, was rejected.
Unfortunately, this has left many families with no other choice but to try to sell their homes. That said, with so many houses for sale, particularly within areas facing the highest risk – and therefore highest premiums – demand simply isn’t there.
This home insurance trend is becoming even more worrying as a new Atlantic Hurricane Season creeps ever closer, with an official start on June 1.
