The gist: Gov. John Bel Edwards called legislators into a special session to address Louisiana’s worsening insurance crisis. Top officials say thousands could lose homes without a fix.
What’s happening? More than 20 insurance companies have closed or pulled out of Louisiana after a series of hurricanes and other disasters cost billions in claims.
Why a special session? Elected officials agree the issue can’t wait until the regular session this spring. This special session is expected to run from Jan. 30 to Feb. 5.
“People are literally going to lose their houses if we don’t have a special session,” Insurance Commissioner Jim Donelon said during a meeting with legislators last week.
125,000 homeowners have moved to Louisiana’s insurer of last resort. Louisiana Citizens Property Insurance Corp., by law, charges much higher premiums than market rates, driving up housing costs for thousands of people.
What’s the fix? Donelon has proposed shifting $45 million into a new fund that would entice insurers back into the market. Insurers would have to match state funds dollar for dollar and commit to five years of business in Louisiana.
Both legislators and the governor back the plan. Gov. Edwards and his counterparts — Senate President Page Cortez, R-Lafayette and House Speaker Clay Schexnayder, R-Gonazles — agree a short-term solution is desperately needed.
“It is a short-term band-aid that can be a first step toward a more long-term solution,” Schexnayder said.
Big picture: Insurance costs are rising as Louisiana becomes more vulnerable to disasters. Flood insurance premiums are also rising, reflecting the skyrocketing cost of risk for Louisiana. Lafayette isn’t immune: some 20,000 flood insurance policyholders in the parish have seen spikes in their premiums.