Why Louisiana residents struggle to get property insurance during hurricane season.  : NPR

Why Louisiana residents struggle to get property insurance during hurricane season. : NPR

Over the past two years, hurricane damage in Louisiana has caused some insurance companies to go out of business. Homeowners deal with higher insurance costs.



LEILA FADEL, HOST:

Tens of thousands of people in Louisiana are scrambling to get homeowner’s insurance in the middle of hurricane season. Most major companies have stopped covering the state’s Gulf Coast. And smaller businesses are going out of business after Louisiana suffered two major hurricanes in the past two years. As NPR’s Debbie Elliott reports, the insurance upheaval comes amid slow disaster recovery.

DEBBIE ELLIOTT, SIDELINE: In Houma, La., the scars from last year’s Hurricane Ida seem fresh. A grocery store in a shopping center is abandoned, its glass front defaced. Traffic lights and gas station awnings are torn out. And faded blue sheets cover the buildings.

JONATHAN FORET: Downtown really took a beating.

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

FORET: I thought it would be easier, but it actually had more of a compounding effect, driving around those things and seeing them broken and destroyed every day. It became more depressing than I thought it would be, you know?

ELLIOTT: His own house still needs repairs. There is a sheet over the roof of his kitchen and he is waiting for a contractor. Now, in the middle of hurricane season, he faces a new complication after his property insurance company goes under.

TRACEE BENNETT: Hi.

FORET: Hey.

ELLIOTT: His agent is Tracee Bennett at La-Terre Insurance Agency.

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

BENNETT: One of them is special.

FORET: Right.

BENNETT: So these are like new policies for citizens. So these are the…

ELLIOTT: Citizens is the Louisiana Citizens Property Insurance Corporation.

BENNETT: We still have damaged people from Ida right now. So if you have an open claim or damage you’re still fixing, Citizens is the only option we have.

ELLIOTT: Her office has tried to help hundreds of clients, like Foret, whose insurance companies either failed or failed to renew their policies on the coast.

BENNETT: I’ve been in the insurance business for as long as I can remember. And this is really the lowest point of where I’ve seen it.

JIM DONELON: It’s a crisis.

ELLIOTT: Louisiana Insurance Commissioner Jim Donelon.

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

ELLIOTT: 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.

DONELON: Unfortunately, half a dozen of them have now gone into receivership.

ELLIOTT: Donelon is among 140,000 affected Louisiana homeowners. He says about half of those policies have been taken over by other firms. However, the burden falls on Citizens, the state insurance company of last resort.

DONELON: They’re absorbing it, but it’s not pretty, as we say, because they’re swamped.

ELLIOTT: He predicts Citizens will triple the number of their policies by the end of the year. And these government policies are more expensive than private insurers, whose rates have also increased. Flood insurance premiums add to the pain. Insurance agent Tracee Bennett.

BENNETT: I can tell you it’s crippling down here. Between that and this it hurts.

ELLIOTT: Houma, La., is a largely working-class town in Terrebonne Parish, in a region criss-crossed by bayous that flows into 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 leaves little room to cope with higher insurance costs associated with inflation, hurricane recovery and the ongoing threat of climate change.

FORET: We’re in it. We are in it in a way that will prevent people from being able to live along the coast.

ELLIOTT: You can see it in south Terrebonne, where schools and fire stations are out. Dozens of houses are abandoned and look the same as they did a week after Ida hit, roofs torn off and furniture scattered in ruins. Alex Kolker, a professor at the Louisiana University Marine Consortium in Cocodrie, says higher costs for cleanup, rebuilding and now insurance could change those cities.

ALEX KOLKER: I think it’s much harder to live in these areas and have the kind of community where people would want to live. So I think you look at, you know, the possibility of climate migration and people moving elsewhere.

ELLIOTT: 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 a rural Terrebonne parish. The thing is, it could happen to so many people across the country in the not-too-distant future.

ELLIOTT: Fannie Celestine’s(ph) experience after Hurricane Ida shows how people are displaced from their communities in a disaster. Her apartment in Houma was condemned after Ida. She is 59 years old and has lost almost all her belongings.

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

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

CELESTINE: It’s a place to stay. But I’m from Houma. And I would like to go back to where I come from. Right, I don’t. have it.

ELLIOTT: She’s tired of relying on relatives to get her to the doctor or shopping, and she’s eager to get back to normal life, just like Jonathan Foret. And on the back of the tractor trailer he sees a literal sign of normality.

FORET: Look; it’s a Mc’Donald’s sign. What? I don’t think we can get insurance. But look; they replace Mc’Donald’s arches, golden arches (laughs).

ELLIOTT: After nearly a year of seeing hurricane-damaged golden arches on the corner, this repair gives him a glimmer of hope that things will get better.

Debbie Elliott, NPR News, Houma, La.

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