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, HOST:
Tens of thousands of people in Louisiana scramble to get property insurance in the middle of hurricane season. Most major companies have stopped covering the state’s Gulf Coast. And smaller companies are going out of business after Louisiana suffered two major hurricane strikes in the past two years. As NPR’s Debbie Elliott reports, the insurance shock comes amid slow-moving disaster recovery.
DEBBIE ELLIOTT, BYLINE: In Houma, La., the scars from last year’s Hurricane Ida appear fresh. A grocery store in a mall is abandoned, its glass front smashed. Signposts and petrol station awnings are torn away. And faded blue tarps cover buildings.
JONATHAN FORET: Downtown has really taken a hit.
ELLIOTT: Jonathan Foret directs the South Louisiana Wetlands Discovery Center in Houma, a city of about 30,000 southwest of New Orleans. On a drive to his insurance agent, he ponders how long the destruction will last.
FORET: I thought it would get easier, but it actually has more of an amplifying effect when you drive past these things and see them broken and destroyed every day. It’s gotten more depressing than I thought you know?
ELLIOTT: His own house needs repairs. A tarp lies over his kitchen roof, waiting for a contractor. Now, in the middle of hurricane season, he faces a new complication after his property insurance company went bust.
TRACEE BENNETT: Hey.
ELLIOTT: His agent is Tracee Bennett of La Terre Insurance Agency.
FORET: All right. So that came in the mail. I just want to make sure all of these have been paid for.
BENNETT: One of them is special.
BENNETT: So these are the new citizen guidelines. So these are the…
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 you are still repairing, Citizens is the only option we have.
ELLIOTT: Your office has scrambled to help hundreds of clients like Foret whose insurance companies have either gone bankrupt or not renewed their policies on the coast.
BENNETT: I’ve been in insurance for as long as I can remember. And that’s really the lowest point 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 of the major national companies stopped offering wind insurance in southern Louisiana. The state turned to about 30 regional companies to fill the gap. But after $22 billion in losses from Category 4 hurricanes Laura in 2020 and Ida last year, it was just too much for some companies to handle.
DONELON: Unfortunately, half a dozen of them have now gone bankrupt.
ELLIOTT: Donelon is among 140,000 affected homeowners in Louisiana. He says about half of those policies have been taken over by other companies. But the burden falls on Citizens, the state insurer of last resort.
DONELON: They’re absorbing it, but it’s not pretty as we speak because they’re being swamped.
ELLIOTT: He predicts Citizens will have tripled its policy count by the end of the year. And these government policies are more expensive than private insurers, whose rates have also increased. In addition to the pain, flood premiums are also increasing. Insurance Agent Tracee Bennett.
BENNETT: I can tell you it was debilitating down here. Between this and that it hurts.
ELLIOTT: Houma, La., is a predominantly working-class city in Terrebonne Parish, a region criss-crossed by bayous that lead to the Gulf of Mexico at its southern end. People work in the oil and gas industry, in ports and in the seafood industry. The average household income in Houma is about $45,000. Jonathan Foret says that doesn’t leave much wiggle room to deal with higher insurance costs, which are compounded with inflation, hurricane recovery and the ongoing threat of climate change.
FORET: We’re in. We are involved in a way that will prevent people from living on the coast.
ELLIOTT: You can see it in southern Terrebonne where schools and fire stations remain out of order. Dozens of homes are abandoned and look the same as they did a week after Ida struck, ripping off roofs and scattering furniture among the rubble. Alex Kolker, a professor at the Louisiana University Marine Consortium in Cocodrie, says the higher costs of cleaning up, rebuilding and now insuring could transform these cities.
ALEX KOLKER: I think it makes it a lot harder to live in those areas and have the kind of community that people want to live in. So I think you’re looking at the possibility of climate migration and human relocation.
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 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: Fannie Celestine (ph)’s experience after Hurricane Ida shows how disaster drives people from their communities. Her council house in Houma was sentenced to Ida. She is 59 and has lost almost all of her belongings.
FANNIE CELESTINE: It’s kinda hard to talk about it without crying.
ELLIOTT: Due to housing shortages near the coast, Celestine lived in a hotel a hundred miles away in Lafayette for months before moving into these FEMA trailers closer to home. It is on a secluded gravel field away from town 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. transportation, not me. have that.
ELLIOTT: Tired of depending on relatives to take her to the doctor or the grocery store, she longs to return to normal life, as does Jonathan Foret. And he discovers a literal sign of normalcy on the back of a semitrailer.
FORET: Look; It’s a Mc’Donald’s sign. What? I mean we can’t get insurance. But look; they replace the Mc’Donald’s arches, golden arches (laughter).
ELLIOTT: After nearly a year of seeing golden arches on the corner devastated by the hurricane, this repair gives him a glimmer of hope that things are getting better.
Debbie Elliott, NPR News, Houma, La.
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