Kenner resident Skip Johnston tried to buy his first home recently and found he could meet the mortgage payments, but not the added insurance payments.

WWL

Some homeowners have found that post-Katrina they can afford a new home, but the problem is that most of the larger insurance companies don’t seem to be writing new policies.

He said the quotes he got on a $250,000 home were for $5,500 per year. That’s close to $450 a month added to his mortgage.

“There’s no way I could afford it,” he said.

Johnston was limited in his efforts to shop around as the only group that would insure the Kenner house was the Louisiana Citizens Plan, the insurance of last resort.

The problem is that most of the larger insurance companies don’t seem to be writing new policies and Citizens is designed to be expensive, so that it doesn’t compete with the other companies.

“Insurance is available,” said the President of the New Orleans Metro Association of Realtors. “It’s just not available at a price people would appreciate.”

However, what has hurt home sales, has helped the sales of condos.

The lure of a condo is that the building’s developer has normally already secured insurance.

“I think we’re seeing a trend of buyers looking at condos for the reason that the insurance is included in their association fees,” said realtor April Gongora.

Skip Johnston is one that will continue to rent – for now – and he sees the cost of owning a home and properly insuring it as an impediment to the region’s return.

“Why should people come back?” he asked. “They’re not going to be able to afford it. I’m thinking of moving myself.”

Insurance officials said it is important for the area to go this season without a hurricane to ease companies’ fears about the area’s vulnerability.