"Worst insurance crisis in history"

State insurance commissioner raises the alarm – asks for legislative intervention

"Worst insurance crisis in history"

Catastrophe & Flood


Louisiana’s newly appointed insurance commissioner has voiced serious concern over the state’s persistent challenge in offering affordable insurance coverage, highlighting the need for legislative measures to attract more insurance providers to the region.

Appointed earlier this year, ex-insurance executive Tim Temple shared his insights with a state legislative committee on Tuesday, emphasizing the gravity of the insurance predicament facing Louisiana.

“Louisiana is experiencing the worst insurance crisis in its history,” Temple remarked. He further elaborated on the financial strain it places on residents, noting, “The average citizen in Louisiana spends more of their paycheck buying insurance than other states, so that’s the crisis that we’re facing.”

The situation worsened following the hurricanes of 2020 and 2021, leading to the financial collapse of several insurers and the exit of others from the state’s market. Access Home Insurance, Americas Insurance, FedNat Insurance, Gulfstream Property and Casualty, Lighthouse Excalibur, Southern Fidelity, State National Fire Insurance and Weston Property & Casualty and many others have recently closed their doors in Louisiana. The state has been desperately trying to find private insurers to take risk away from its insurer of last resort, Citizens.

Temple detailed the impact of these natural disasters, stating, “We’ve had four hurricanes in a 12-month period, 800,000 property claims, again it was unprecedented. And as a result of that, we’ve had 12 markets that went insolvent. Those are 12 markets that took consumers’ premium dollars with a business plan that was supposed to pay claims and they didn’t. They went insolvent.”

He also bemoaned the reluctance of reinsurance companies to operate in Louisiana, highlighting their disinterest in covering risks within the state.

During the same legislative session, insurance industry representatives shared their perspectives. Noel Bunol, of Gulf States Insurance, and Eric Berger, of Gray Insurance Company, blamed excessive litigation and regulation as major deterrents for insurers considering entering the Louisiana market.

Attorney Rep. Edmond Jordan (D-Baton Rouge), who co-owns Cypress Insurance Agency in Baton Rouge, questioned the focus on litigation as a primary issue driving up insurance premiums, while Ben Riggs, from Louisiana Progress, argued against blaming property owners for seeking legal recourse when insurance companies fail to provide fair treatment.

Temple proposed several insurance reforms, including modifying the rule that protects customers from being dropped by carriers after three years, aiming to allow companies more flexibility in managing risk. He also suggested a shift from the prior approval system for rate changes to a file-and-use system, which would enable insurers to implement rate changes more swiftly.

“Louisiana has a very heavy-handed regulatory reputation,” said Temple. “We’re changing that.”

Last year, the previous insurance commissioner, Jim Donelon, had pinned his hopes on an incentive plan for insurers worth $45 million. That attempt, however, hasn’t been enough so far, given the state’s high risk of weather damage. According to the National Oceanographic and Atmospheric Association (NOAA), 63 hurricanes have struck Louisiana since 1822, second in number only to Florida and Texas. In any given year, the city of New Orleans has about a 40% chance of being struck by a tropical storm.

Louisiana storms in recent history

  • September 9, 2000: Tropical Depression Nine hits near the Texas-Louisiana border, affecting Louisiana with significant rainfall and minor damage in Terrebonne Parish.
  • Early June 2001: Tropical Storm Allison causes catastrophic flooding in Louisiana, with damages totaling $65 million.
  • August 6, 2001: Tropical Storm Barry brings 2–3 ft tides to southeastern Louisiana, then makes landfall in Florida.
  • August 5, 2002: Tropical Storm Bertha lands in Boothville, Louisiana, causing scattered rainfall and $150,000 in damages.
  • September 5, 2002: Tropical Storm Fay makes landfall in Texas, affecting Louisiana with light rainfall and minor coastal flooding.
  • September 14, 2002: Tropical Storm Hanna impacts Louisiana minimally despite making landfall near the Mississippi River mouth.
  • September 26, 2002: Hurricane Isidore lands west of Grand Isle as a tropical storm, causing widespread flooding and damage.
  • October 3, 2002: Hurricane Lili hits near Intracoastal City, causing over $790 million in damage and significant agricultural losses.
  • June 30, 2003: Tropical Storm Bill results in a moderate storm surge, flooding homes in Montegut and causing $4.1 million in damages.
  • August 31, 2003: Tropical Storm Grace brings light rainfall across Louisiana.
  • September 15–16 and 22-23, 2004: Hurricane Ivan causes wind damage and power outages, resulting in approximately $7.9 million in damages.
  • October 10, 2004: Tropical Storm Matthew causes beach erosion, flooding, and $255,000 in damages.
  • 2005–2009: Significant events include Hurricanes Cindy, Dennis, Katrina, Rita, and others, with Katrina causing unprecedented flooding and damage in New Orleans.
  • 2010–2019: Highlights include Tropical Storms Bonnie, Lee, Debby, and Hurricanes Isaac, Barry, and others, with Isaac causing severe flooding in LaPlace.
  • 2020–present: Notable storms include Tropical Storm Cristobal, Hurricanes Marco, Laura, Delta, Zeta, and Ida, with Laura and Ida causing extensive damage and fatalities.

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