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

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

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



LEILA FADEL, GUEST:

Tens of thousands of people in Louisiana are struggling to get property insurance in the midst of hurricane season. Most large corporations have stopped dealing with the state’s Gulf Coast. And smaller companies are going out of business after Louisiana suffered two major hurricanes in the past two years. As NPR’s Debbie Elliott reports, the insurance shock comes in the midst of a slow disaster recovery.

DEBBIE ELLIOTT, BYLINE: In Houma, Los Angeles, the scars from last year’s Hurricane Ida look fresh. A grocery store in a shopping mall is abandoned, its glass facade broken. Road signs and gas station awnings were torn off. And faded blue tarps cover the buildings.

JONATHAN FORET: The downtown area was really hit.

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

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

ELLIOTT: His house still needs repairs. A tarp is over his kitchen roof, waiting for a contractor. Now, in the midst of hurricane season, he’s facing a new complication after his property insurance company goes bankrupt.

TRACEE BENNETT: Hey.

FORET: Hey.

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

FORET: Okay. So this came in the mail. I just want to make sure all of these have been paid for.

BENNETT: One of them is special.

FORET: Right.

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

ELLIOTT: Citizens is the state-run Louisiana Citizens Property Insurance Corporation.

BENNETT: Right now, we still have people with damage from Ida. So if you have an open claim or damage that you are still repairing, Citizens is the only option we have.

ELLIOTT: His office has been quick to help hundreds of clients, like Foret, who have bankrupted their insurance companies or have not renewed their policies on the coast.

BENNETT: I’ve been insured 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: Jim Donelon, Louisiana Insurance Commissioner.

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

ELLIOTT: After those devastating storms of 2005, most of the major national companies stopped offering wind insurance in southern Louisiana. The state has turned to around 30 regional companies to close 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 to manage.

DONELON: Unfortunately, half a dozen of these ended up in receivership.

ELLIOTT: Donelon is among 140,000 Louisiana homeowners affected. He says about half of these policies have been taken over by other companies. But the burden is falling on Citizens, the state insurer of last resort.

DONELON: They are absorbing it, but it is not nice as we speak, because they are being flooded.

ELLIOTT: He predicts citizens will have tripled the number of policies by the end of the year. And those government policies are more expensive than private insurers, whose rates have also risen. In addition to the pain, flood premiums are also increasing. Insurance agent Tracee Bennett.

BENNETT: I can tell you it was paralyzing down here. Between this and this, this hurts.

ELLIOTT: Houma, in Los Angeles, is a predominantly working-class town in the parish of Terrebonne, a region full of bayou that leads to the Gulf of Mexico at the southern end. People work in the oil and gas industry, ports and seafood. The median household income in Houma is around $ 45,000. Jonathan Foret says he doesn’t leave much room for maneuver to cope with higher insurance costs, layered with inflation, the resurgence of the hurricane and the continuing threat of climate change.

FORET: Here we are. For example, we are involved in a way that will prevent people from being able to live along the coast.

ELLIOTT: You can see it in the south of Terrebonne, where schools and fire stations remain out of service. Dozens of houses are abandoned and look just as they did a week after Ida’s impact, roofs ripped and furniture scattered among the rubble. Alex Kolker, a professor at the Louisiana University Marine Consortium in Cocodrie, says the higher costs for cleaning, rebuilding and now insurance could transform these cities.

ALEX KOLKER: I think it makes these areas much harder to live in and more difficult to have the kind of community that people would like to live in. So I think you look, you know, at the possibility of climate migration and people moving elsewhere.

ELLIOTT: Kolker says what’s going on here should be a wake-up call.

KOLKER: The real problem is that there aren’t just a few isolated people in the rural parish of Terrebonne. It is that this could happen to so many people across the country in the not too distant future.

ELLIOTT: The experience of Fannie Celestine (ph) after Hurricane Ida shows how people are being displaced from their communities in a disaster. Her social housing apartment in Houma was sentenced after Ida. She is 59 years old and has lost almost all of her possessions.

FANNIE CELESTINE: It’s a little hard to talk about it without crying.

ELLIOTT: Due to the housing shortage near the coast, Celestine lived for months in a hotel 100 miles away in Lafayette before moving into this FEMA trailer closer to home. It is on an isolated gravel field away from the city with no public transport.

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

ELLIOTT: She is tired of depending on relatives to take her to the doctor or to do the shopping and she longs to get back to normal life, so does Jonathan Foret. And she sees a literal sign of normality on the back of a tractor trailer.

FORET: Look; it is a sign of Mc Donald. What? I mean, we can’t have insurance. But look; they’re replacing the McDonald’s arches, the golden arches (laughter).

ELLIOTT: After nearly a year of seeing a hurricane-mutilated golden arch on the corner, this repair gives him a glimmer of hope that things will improve.

Debbie Elliott, NPR News, Houma, Los Angeles.

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