NEW ORLEANS — Thousands of people are opening letters this week saying their homeowner's insurance policy is being cancelled.
Others already have a new policy, and have to pay a lot more for the same coverage.
So, what's happening and when might there be some relief?
“We had a hurricane that came through, you could be found without any coverage. You could be liable for any damages. It could really put people in a tough spot,” said John Sibley, a Keller Williams realtor with the Sibley Group.
Realtor and homeowner, Sibley is concerned about the short notice he and his clients are getting about their homeowners insurance being cancelled.
“On my personal home, the policy's almost doubling,” he said about the rise in cost of his new policy.
The crisis has insurance agents scrambling to find new policies for clients.
Insurance agent with TWFG Stephen Lovecchio says he is working, “18 hour days, 7 days a week,” to get all of his clients into a new policy after being dropped.
Some companies couldn't afford the rising prices for the financial backing of global reinsurance companies. Other companies decided to no longer take the risk in southern Louisiana after five big storms in 2020 and 2021.
“In those 400 days, those insurance companies and the reinsurance companies, paid out every dollar that they collected since Katrina,” Lovecchio said.
That’s nearly 20 years of premiums gone.
Louisiana Insurance Commissioner Jim Donelon says the crisis so far has affected 85,000 people. Of those, 55,000 were seamlessly moved to a company out of Miami. That leaves another 30,000 with a short transition time to find another policy.
“There is no solution to keep it from happening, because we are the bullseye in the hurricane prone states,” Donelon said.
For the long term, he says homes need to be built stronger and higher. For the immediate future, he says a bill was recently passed in the legislature to offer incentives for insurance companies to cover homes in the state. It's just like the one that brought companies back after Hurricanes Katrina and Rita.
“We're asking the governor to make funds available to do it. Governor Blanco made $100 million of funds available. And for 15 years it worked very well. It will happen again. It will start to happen toward the end of this year. It's the natural cycle of insurance,” Donelon explained.
A bill was also passed to make companies have a $10 million on hand, called a surplus, before they can be licensed. That, and fewer major storms, he hopes will attract policy writers back to this area.
Insurance agents say the best way to lower your premium is to let your agent know if you have a new roof, a monitored alarm system, and updated plumbing or electrical. A new roof can take off as much as 30 percent.