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Sticker shock for some, rate hikes for most homeowner's and flood insurance

Last year, he paid roughly $2000 for flood insurance. He just got the bill for this year. It’s now more than $8,000.

With hurricane season approaching, you may notice that premiums for your homeowner’s and flood insurance are higher than last year. We’ve heard from several viewers who say the bills for their policies this year are absurdly high.

Wayne Melerine sent us an email about his family’s home in Delacroix in St. Bernard Parish. Before it became a fishing camp for rent, it was where Melerine was raised. His dad built it in 1965, after Hurricane Betsy.

“This house is the oldest house on Delacroix Island,” said Melerine.

For a number of reasons, Melerine says he can’t sell the home. One reason is sentimental value.

“I’m 67, I’m just fighting to try to save this, maybe have it for my girls one day,” said Melerine.

For years, he’s maintained it and kept it insured. Last year, he paid roughly $2000 for flood insurance. He just got the bill for this year. It’s now more than $8,000. That’s about a 300% increase.

“That would amount to $700 or something a month. Nobody in their right mind can afford this. I thought the government came in and helped people with flood insurance,” said Melerine.

“A 300% rate increase is an outlier,” said Jim Donelon.

Louisiana Insurance Commissioner Jim Donelon says Melerine’s case is a head scratcher because the National Flood Insurance Program caps rate increases for residential policies at 18% percent and commercial ones at 25%. One of our colleagues shared her bill with us. It has jumped from $516 dollars last year to $572 this year. The 10% increase is more in line with what Donelon predicted last year following a record-breaking hurricane season

“That experience was where five named storms made landfall in our state, three of them reaching hurricane status,” said Donelon.

2020 was a banner year not only for storms but also wildfires out west and earthquakes overseas. Donelon says all of that combined forced insurance companies to raise rates so they could keep insuring customers. Donelon calls it “re-insurance.” He says your premiums may go up depending on several factors, including if your policy is with a national carrier versus a regional one.

“Myself on my home in Metairie lowered my premium by $600 a month 10 years ago going from a major national carrier to one of those small regional carriers,” said Donelon.

Last year, Donelon predicted rates for homeowners insurance would likely increase 5%-10%. For the first quarter, Donelon says rates across Louisiana are up about 3%. These rate increases are hitting just a few weeks before the start of this hurricane season. So far, forecasts call for an above average season with 17 named storms. Wayne Melerine says he can’t afford $8,000 for flood insurance and will have to take his chances this year.

“We’re going to wish for luck and hope nothing comes through here,” said Melerine.

The home has survived multiple hurricanes including Katrina in 2005. Melerine prays it can hold on as he navigates a financial storm.

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