By Sabrina Wilson
Published: Aug. 29, 2024 at 7:44 PM CDT
NEW ORLEANS (WVUE) -On the third anniversary of Hurricane Ida, Louisiana Insurance Commissioner Tim Temple discussed the stubborn insurance crisis and said he works every day to solve the problem.
Hundreds of thousands of insurance claims were filed after Ida devastated southeast Louisiana on August 29, 2021, the same day Hurricane Katrina had overwhelmed the levees in New Orleans 19 years earlier.
During an interview with FOX 8 Temple was asked to describe the state of Louisiana’s insurance market.
“Still in crisis,” he said.
After Hurricanes Laura and Ida in 2020 and 2021, respectively, 12 insurers became insolvent, and Temple says another two dozen or more stopped writing policies in the state. This forced property owners to turn to the state’s insurer of last resort, Louisiana Citizens, for coverage.
Temple said La. Citizens currently have 131,000 policies, but there is a bright spot.
“I think the good news from that, if you look at it from that perspective is that the policies, all these policies that went into Citizens after the hurricanes were not necessarily bad risk but went into Citizens because of a lack of market, a lack of competition which I anticipate as we continue to improve the Louisiana marketplace those policies should be attractive to new carriers and companies that want to write in Louisiana,” he said.
Temple said a little over a hundred insurers operate in Louisiana, but he could not say exactly how many are writing new wind and hail policies in the state.
“We don’t track that information. We don’t have an active way, that would require us to issue a data call but I can tell you just from what I hear traveling the state dealing with insurance agents, talking with citizens there’s not a lot of competition out there,” he said.
When FOX 8 asked Temple if he would estimate that the number is under a dozen, he said, “I would think that would probably be a fair assumption.”
Temple pushed for insurance-related reforms during this year’s legislative session to entice more insurers to the state. One change allows insurance companies to begin dropping a percentage of their policies. The state prohibited such for years if a policy had been on an insurance company’s books for three years.
Temple says the reforms are getting insurers’ attention, and they are more willing to consider doing business in the state.
“Certainly, absolutely. I’ve had conversations with companies that are actually going through the application process right now with the Department of Insurance. They specifically cite the changes that were made, the changes that the legislature, you know, voted on and the governor signed into law that were designed to make Louisiana more attractive, the three-year rule was one of those,” he said.
Asked to quantity the number of interested insurers, he said, “I know we have more than three companies that are going through the application process with Louisiana, I’m in active conversations with several more that are looking at Louisiana, asking us questions about what is the application process,” saidTemple.
Andview Temple said some insurers already operating in Louisiana are viewing the reforms favorably.
“They have told me that they’re looking at their underwriting guidelines, they’re taking into account the legislative changes that were enacted with the intent of coming and starting to write more policies in Louisiana,” said Temple.
Temple is confident that when some insurers drop policies under the repealed three-year rule, others will be ready to insure those properties.
“Certainly, I mean you know, again Louisiana was the only state to have the three-year-rule as it was prior to legislative changes. It works, the free market works in all other states in America, so I certainly and fully anticipate that we can create a competitive marketplace in Louisiana,” he said.
He believes that more affordable coverage will eventually be available to Louisiana residents.
“I’m certain that competition will drive premiums down so that’s what we’re aiming for,” said Temple.”
He fully supports the Louisiana Fortify Homes Program begun by his predecessor, Jim Donelon. But Temple wants to modify the application process. Under Donelon, it was first-come, first-served.
Temple says registration for future rounds of the grants will be conducted using a lottery system. Registration opens on September 18th and closes on Friday, September 20th.
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