Hurricanes won’t affect insurance availability

Published 12:00 am Friday, November 14, 2008


Editor and Publisher

LAPLACE — Even with the hit of not one, but two more hurricanes to Southeast Louisiana this year, a state insurance department official said Louisiana continues to see an improved picture in terms of the availability of affordable insurance.

Allison Jones, an officer with the Louisiana Department of Insurance, visited with the LaPlace Rotary Club and gave an update on the state insurance picture after hurricanes Gustav and Ike made their presence known barely a month ago.

“The good news is that even after Gustav and Ike hit the region, we didn’t have insurance companies deciding to leave,” she said. “We are continuing to see more companies return to Louisiana and start writing business, and that is a very good thing for the people here.”

Currently, Allstate and State Farm have 40 percent of the state’s insurance coverage for homeowners and businesses protecting their structures.

Jones said that Insurance Commissioner Jim Donelon continues to work on changing that so there will be more competition.

“One of the best things we did was to offer some financial incentives for new companies coming here and writing a certain level of new business,” she explained. “We had five new companies come back to Louisiana and start doing business here again.”

Previous to that, 12 new companies had returned in the period of time after Hurricane Katrina hit just over three years ago.

“Greed rules the insurance companies,” she said. “When some companies come here, then others think they are getting all the business and making the money, so others want to come here.

“And we retained all of our companies even after Gustav and Ike, so that was a very good thing,” she said.

Allstate continues to refuse to write new business in Louisiana, only because they feel like they have too much exposure for the hurricane-prone state. And Jones said that the state insurance department would also like to see Allstate reduce their market share.

One club member complained about having a home in New Orleans that was a total loss after Katrina. He had his insurance with Allstate, and bought a new house, but was not offered a policy by Allstate.

“Unfortunately they have a right to do that,” Jones said. “But there is now a three-year protection rule that says a company cannot cancel your current policy for anything other than fraud, if you have been with them for three years.”

But even with that law in effect, and some individuals afraid to leave their long-time companies, Jones said it is still a good idea to shop around your rates from time-to-time since new companies continue to come to the state.

Jones said that Louisiana had watched two years ago when Florida had four hurricanes race back-and-forth across the state. The Florida Legislature reacted in a knee-jerk way, writing such strong language into the insurance laws that many companies left and didn’t want to come back.

“Fortunately our Legislature has been careful in the way we have changed our laws,” she said. “I think our Legislature has actually done a very good job in doing things that are encouraging companies to come back here, and that competition is the best thing for the policy holders.”