Why Louisianans Struggle to Get Property Insurance During Hurricane Season. : NPR

Over the past two years, hurricane-related damage in Louisiana has forced some insurance companies out of business. Homeowners deal with higher insurance costs.



LEILA FADEL, PRESIDENT:

Tens of thousands of people in Louisiana are struggling to get property insurance in the middle of hurricane season. Most major companies have stopped covering the Gulf Coast. And smaller businesses are going out of business after Louisiana took two major hurricane hits in the past two years. As NPR’s Debbie Elliott reports, the insurance turmoil comes amid a slow-moving disaster recovery.

DEBBIE ELLIOTT, AUTHOR: In Houma, Louisiana, the scars from last year’s Hurricane Ida look fresh. A grocery store in the mall is abandoned, its glass front smashed. The signs and canopies of the gas stations have been defaced. And faded blue tarps cover the buildings.

JONATHAN FORRETT: The inner city was really hit.

THE FIR: Jonathan Foret runs the South Louisiana Wetlands Discovery Center in Houma, a city of about 30,000 people southwest of New Orleans. On a trip to meet his insurance agent, he reflects on how the destruction has slowed.

FORRETT: I thought it would get easier, but it actually had more of an aggravating effect of driving up to these things and seeing them broken and destroyed every day. It’s been more depressing than I thought it would be, you know?

FIR: His own home still needs repairs. A tarp is over his kitchen roof waiting for a contractor. Now, in the midst of hurricane season, he faces a new complication after his property insurance company goes bankrupt.

TRACY BENNETT: Hey.

FORRETT: Hey.

ELITE: His agent is Tracy Bennett of La-Terre Insurance Agency.

FORRETT: Okay. So this came in the mail. I just want to make sure this is all paid for.

BENNETT: One of them is special.

FORRETT: That’s right.

BENNETT: So these are like the new citizen policies. So these are the…

FIR: Citizens is Louisiana’s statewide Citizens Property Insurance Corporation.

BENNETT: Right now, we still have people with damage from Ida. So if you have an open claim or damage that you are still fixing, Citizens is the only option we have.

FIR: Her office struggled to help hundreds of clients, like Forret, whose insurance companies either went bankrupt or didn’t renew policies on the coast.

BENNETT: I’ve been in insurance for as long as I can remember. And that’s really the lowest point I’ve ever seen it at.

JIM DONNELLON: It’s a crisis.

ELLIOTT: Louisiana Insurance Commissioner Jim Donnellon.

DONNELLON: Probably a little less than Katrina and Rita, but very close.

THE FIR: After those devastating storms in 2005, most major national firms stopped offering wind insurance in South Louisiana. The state has turned to about 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 too much for some companies to handle.

DONNELLON: Unfortunately, half a dozen of them have already gone into receivership.

THE FIR: Donelon is among 140,000 Louisiana homeowners affected. He says about half of those policies have been taken over by other firms. But the onus falls on Citizens, the government’s insurer of last resort.

DONNELLON: They’re getting it, but it’s not good as we speak because they’re flooded.

FIR: He predicts that Citizens will have tripled its policy numbers 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 are also on the rise. Tracy Bennett Insurance Agent.

BENNETT: I can tell you it was crippling down here. Between this and this, it hurts.

ELLIOTT: Houma, Louisiana, is a mostly working-class town in Terrebonne Parish, a region dotted with bodies of water that lead to the Gulf of Mexico at its southern end. People work in the oil and gas industry, in ports and in seafood. The median household income in Houma is about $45,000. Jonathan Foret says that doesn’t leave much wiggle room to deal with higher insurance costs layered with inflation, hurricane recovery and the ongoing threat of climate change.

FORRETT: We’re in it. For example, we are in it in a way that will prevent people from being able to live on the coast.

THE FIR: You can see it in south Terrebonne, where schools and fire stations remain out of service. Dozens of homes are abandoned and look just as they did a week after Ida hit, with roofs ripped off and furniture scattered among the wreckage. Alex Kolker, a professor at the University of Louisiana at Cocodary Marine Consortium, says the higher costs of cleanup, restoration and current insurance could transform these towns.

ALEX KOLKER: I think it makes these areas much more difficult to live in and more difficult to have a community that people would want to live in. So I think you’re looking at the possibility of climate migration and people moving elsewhere.

ELITE: Kolker says what’s happening here should be a wake-up call.

KOLKER: The real problem is that it’s not just a few isolated people in rural Terrebonne Parish. It’s that this could happen to so many people across the country in the not too distant future.

THE FIR: Fanny Celestin’s(ph) experience after Hurricane Ida shows how people are displaced from their communities by disaster. Her public housing apartment in Houma was condemned after Ida. She is 59 and has lost almost all her belongings.

FANNIE CELESTINE: It’s hard to talk about without crying.

THE FIR: Due to a housing shortage near the coast, Celestine lived for months in a hotel a hundred miles away in Lafayette before moving into this FEMA trailer closer to home. It is located in an isolated gravel field, far from the city, with no public transport.

CELESTEIN: It’s a place to stay. But I’m from Houma. And I’d like to go back to where I’m from. Transportation, I don’t. i have this

THE FIR: She’s tired of depending on relatives to take her to the doctor or shopping, and longs to get back to a normal life, just like Jonathan Foret. And he notices a literal sign of normality on the back of a tractor trailer.

FORRETT: Look; it’s a Mc’Donald’s sign. What? I mean we can’t get insurance. But look; they replace the Mc’Donald’s arches, the golden arches (laughter).

THE FIR: After nearly a year of seeing hurricane-disfigured golden arches on the corner, this renovation gives him a glimmer of hope that things will improve.

Debbie Elliott, NPR News, Houma, La.

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