Support for this program is provided by the Foundation for Excellence in Louisiana Public Broadcasting.

And from viewers like you.

Support for this program is provided by the Louisiana Department of Health.

Working to improve disparities in health care and improve health outcomes for all citizens.

Information at ldh.la.gov Hello and welcome to Louisiana Spotlight.

I'm Karen Leblanc, your host for tonight's show.

Homeowners across the state have begun to feel the brunt of an insurance crisis that has been looming for years.

In 2020, hurricanes Laura, Delta and Zeta resulted in nearly $11 billion worth of insurance claims that overwhelmed insurers.

And in 2021, following hurricane Ida, an additional 14 billion in claims were made.

That caused many insurers to go insolvent and several others bolting for higher ground, leaving many Louisianians high and dry when it comes to coverage.

Today, we are faced with an up ended insurance market that has caused rates to skyrocket.

Distressing homeowners across the state.

Tonight, we'll dig into that crisis and look at how we got there.

We'll explore solutions.

We'll hear from homeowners struggling to keep a roof over their heads.

Insurance experts and advocates navigating the storm and policymakers grappling for answers.

But first, we'll hear from homeowners who have been directly impacted by Louisiana's insurance crisis.

Jim Starnes and his wife have lived in their Mandeville home for 18 years.

It was supposed to be there forever.

Home until premium hikes for property and flood insurance left them struggling to find and afford coverage.

Never one to leave.

When she saw how the premiums were increasing, she said, We're going to move in three years.

So she's leaving the beloved Louisiana.

That's what she wants to do now.

And that's sad.

Several devastating hurricanes in recent history have left insurance companies struggling to pay claims.

Many insurers have quit writing policies and others have gone into liquidation, leaving few options for consumers.

The insurance company that we had pulled out of the state notes, and when they did that, nobody was writing insurance south of our 12 where were miles south of our well.

So the only insurance we could get was L.A. citizens, which was a very expensive policy.

The Louisiana Citizens Property Insurance Corporation is run by the state of Louisiana as a property insurance plan of last resort.

Thousands of Louisiana property owners have been forced into the program after insurance companies quit writing policies or went out of business.

So this year, L.A. Citizens increased my policy 74%.

Sky rocketed.

Because of that, when my mortgage company paid that policy.

Now my escrow is way, way short.

Not only are they charge me for the the escrow that they paid for, now the reserve that they want to hold has increased.

So my my home payment was going to go up probably about 30%.

Jim isn't the only homeowner struggling with the increases to insurance premiums.

Jessica Jones Langford's home was severely damaged during Hurricane Ida.

Her insurer Americas became insolvent shortly after the storm.

Almost three years later, she's still fighting to settle her claims, while also dealing with a 300% increase to her premium.

The laundry room slash pantry.

We have this lovely plastic wall that has lived here for the past two and a half years to try and protect us from the elements.

The cabinets were all ripped out.

And so you can see subfloor down here.

We've got we called our insurance company when we were on the road the following day after the hurricane, when we made the decision we were going to leave.

We were with Americas at the time, and the beginning of the process seemed like it was going to go smoothly.

But that did not last very long.

When they started arguing about things like if the washer and dryer had been damaged beyond repair and and then it really got hairy when we found out from the roofing company that the roof to the back patio was no longer stable, it kind of shifted and the insurance company refused to send a structural engineer.

It was within days after that that I got the notification that they had been put into.

I don't even remember what the word was, but they were bankrupt.

I bled all of the equity out of my company trying to get the repairs done.

I ended up, you know, not being able to keep going because bills start getting higher and higher and you've bled everything out that you had in savings trying to fix the house, and that comes to a dead stop.

So we basically have been living in limbo for two and a half years.

There is no trim in the windows or the doors because that was not included in the original insurance estimate.

This room we got about 1800 dollars for and it was completely gutted down to the studs.

So there's no cabinets, there's no pay making a difficult situation even worse.

Jessica is now having to face huge increases to her insurance premiums.

My insurance was 1800 dollars a year at the time of Hurricane Ida.

It went up to 2500 the next year.

And at the next most recent renewal, it was 70 $200 and some change, which in case your next question is how much did that impact your mortgage?

A lot.

$967 a month increased on my mortgage.

My mortgage is now about 60% of my take home pay.

I never saw myself leaving this place.

But after being put through the ringer, can you afford to stay?

And when I do finally get the repairs done and I can finally sell this house and move on with my life, can I afford to live in another house in the New Orleans region?

Because am I going to be paying $10,000 a year in insurance?

Can I afford to live here?

I don't know, because I haven't tried to do the math because I'm trapped.

It doesn't matter right now what the rest of the housing market looks like.

I can't make that decision.

First, I have to fix this house.

I'm almost $1,000 a month increased on my mortgage.

I can't do anything.

I can't make a move.

How fair is that?

How how is it legal for me to be trapped in this position through no fault of my own?

I didn't fail to pay my premium.

I didn't let my policy lapse.

And I'm trying to argue with you about please cover me any way, because it was whatever I did all the right things and they just said, well, they're not helping.

Insurance was supposed to help.

I've not been allowed to make decisions about my future.

My decisions are, how are you going to pay the bills today?

This crisis has clearly caused a lot of desperation and has even forced some to consider leaving the state.

And it is affecting nearly everyone.

Since 2021, at least 11 property insurance companies have become insolvent and 12 others have ceased writing new policies in the state.

The exodus impacted an estimated 184,000 policies, leaving many scrambling for coverage.

Homeowners insurance rates saw an 18.5% jump in 2022 compared to 2021 and from May 20, 22 to May 2023, rates surged another 27%.

So how do we get out of this mess and how did we get here in the first place?

Joining me now to help answer some of these questions is Ben Riggs.

He is the executive director of Real Reform Louisiana.

Mr. Riggs, thank you so much for joining us on this very important topic.

I'd like to start by asking for viewers who are not familiar with reform, the work of your organization.

Well, real Reform is a nonprofit, nonpartisan organization that works for real insurance reforms and to protect consumers here in the state of Louisiana, to ensure that we're fostering a competitive marketplace that helps move our entire state forward without sacrificing the best interests of Louisiana policyholders.

And you're really advocating for fair practices.

Can you elaborate on some specific examples of practices that are currently exacerbating the insurance crisis?

Well, I would say one way in which Louisiana got into the crisis that is in now is a history of really lax regulation and being all too welcoming of less than reputable insurers.

You had 12 insurers go bankrupt after those four major storms.

11 of them were making use of this affiliate model in which they were moving hundreds of millions of dollars into an insurer owned affiliate and keeping the liability with the insurer so that when the storms came and people started to file their claims, the their insurance companies just didn't pay the claims, they went bankrupt.

I mean, there was a reporting that showed some of these companies took the money and bought five or $6 million hunting lodges that the CEO of the company's family lived in for years.

So we really have had a lax regulatory environment that allows insurance companies to get away with things that disadvantage policyholders.

We also allow insurance companies, particularly auto insurance side, to do things like include credit scores and the price that you pay your premium rates.

And Louisiana has the second worst credit score in the country.

And so it's no surprise that there's a strong correlation between that and the auto insurance rates we're paying, which are the second highest in the country as well.

So essentially what you're saying is insurance companies have been largely unregulated.

Transparency is lacking.

They're playing sort of a shell game.

Right.

Moving this money around, That's one issue.

Well, there was this eagerness to just welcome any insurers into the state, even though there were questions about how reliable consumers could see these companies as.

And what ended up happening was when the insured needed their insurers to pay their claims, much like we just saw in the story.

They weren't there to pay the claims.

And that's the tragic story.

The homeowner that said, you know, insurance is my safety net.

That's what it was designed for.

But more and more people are being left high and dry.

Now, insurance companies will point to the state of Louisiana and say, well, look, you're just a magnet for hurricanes.

Look at all the storms that have hit in recent years.

Now we're going on about three years of no, no hurricanes, major hurricanes.

Right.

So that should hopefully improve the climate for companies to start writing policies again.

But in addition to these hurricanes that have contributed to higher rates, what other issues do you see that are exacerbating this situation?

Well, it's true.

Louisiana has a densely populated coastline.

We're in close proximity to the Gulf of Mexico.

Obviously.

I believe one fifth of all named storms make landfall in Louisiana.

Those are all serious problems that increase the risks that insurance companies incur when they come to Louisiana.

I would say that the other major contributing factor of late has been the increased cost of repair materials.

So if something if you know, if your roof is damaged, the lumber that it takes to fix it costs more and that just ends up being baked into the cost as well.

I think those are the two primary driving factors, but I think that those things should also inform our solution to the problem.

We talk about cost of materials.

Age of the roof, a lot of home insurance companies are now using the age of the roof as a reason for either not writing the policy or charging a higher rate.

In Louisiana, it seems to be that that ten year mark is that crucial mark with roofs that almost justify insurance companies to raise their rates.

Any thoughts in that regards on maybe what we can do in that area to help reduce and get a handle on premiums?

I'm a big supporter of the fortified Roof program.

I think the fortified Roof program helps upgrade our housing stock so that it can withstand the type of storms that we know they're coming.

It might not be this year, it might not be next year.

But we know the storms are coming and upgrading our housing stocks enables us to withstand those storms and it reduces the risk that insurance companies incur when they come here.

And it's the one way that you can guarantee you'll get a discount there.

Actually, a law that says you have to get an actuarially justified discount as a result of getting your roof fortified.

And so I'm a strong supporter of the roof fortification program.

So in addition to that, as one possible solution to helping tackle these exorbitant insurance rates.

Any other alternative solutions?

Well, I think there I think it's also important that we not do things that make the problem worse.

There's a lot of talk about stripping away policyholders rights.

There's a lot of talk about stripping away regulations that help hold insurance companies accountable.

The truth is, Louisiana is in the midst of an insurance crisis.

But it's also true that the people suffering the brunt of that crisis are homeowners, Louisiana families and small businesses who are struggling to keep a roof over their kids head and keep their businesses open.

And we can do things that take away their rights and make it harder to get their insurance companies to pay their claims.

But that's just going to exacerbate the situation.

We've heard the horror stories of homeowners struggling with their insurers to get them to pay them what they are owed.

They've paid high premiums for years, and there's often many, many, many years where insurance companies are collecting premiums and there are no claims paid out.

There are no storms.

So when a storm does strike and the insured expects their insurance company to pay them what they're owed in a prompt way so that they can rebuild their home and get back on track with their life.

Well, before we wrap up this interview, I want to get to two things.

The number one, in your opinion, what can we do to make the market more attractive for insurance companies to also support increased competition to help lower rates?

Well, the a lot of the major insurers in a survey with the National Association of Insurance Commissioners said that the primary factors driving increased premiums were the increased threat of severe weather and the volatility of that threat, how difficult it was to predict when it was going to come and how frequently.

So any effort to stabilize the market, reduce risk and ultimately reduce premiums has to address those core concerns.

Anything else, in my opinion, is a sideshow in potentially even an effort on behalf of the insurance industry to exploit a crisis to further remove regulations, to further remove consumer protections or consumer rights in order to help pad their profits, which is something I'm deeply concerned about.

But efforts to mitigate risk efforts to fortify roofs, better community planning, better land use.

I think those things are all efforts that could have a beneficial long term impact, which is one reason I actually think the three year rule is a good rule for Louisiana.

If you were to get rid of the three year rule in Louisiana, you would see a large, large, large number of people, particularly south of eight, ten and 12, be forced off of their insurance policies.

Their policies would be canceled.

And when those policies are canceled, they're going to be sent on to citizens policies where they're going to be by law, charge 10% more.

That means that we've effectively made home insurance less available by forcing them onto the insurer of last resort books and less affordable by charging them 10% more than the market price.

That's pouring gas on the fire.

What the three year rule does do, though, if we keep it in place, and I think we should, because it's Louisiana strongest consumer protection, it also gives an incentive to insurers to work with local communities, to work with city and parish governments, to work with the state of Louisiana as a partner in these areas that actively helps mitigate risk, that invest in risk mitigation.

And I think from that point of view, we can see an opportunity to form a public private partnership that can help pull Louisiana out of this insurance crisis.

But if we're not addressing risk and we're focusing on consumer rights and we're focusing on policyholder rights and deregulating, I fear that were pouring gas on the fire and we're heading towards making the situation worse.

And we will leave our interview on that note.

Bin Riggs, thank you so much for joining us and sharing your insight with us as we work to inform our viewers on the insurance crisis and the opportunities to improve things.

Thank you so much.

Well, coming up, I'll sit down with policymakers and advocates to take a deeper dive into what's at stake and changes they hope to make when it comes to the insurance crisis.

But first, we will hear from attorney Mark Montiel whose law firm Montiel Hodge represents policyholders whose insurers became insolvent and are now in the lengthy process of litigating their claims with Lega, the Louisiana Insurance Guaranty Association.

So Mark Montiel.

I'm a partner of Montiel Hodge in New Orleans.

The firm primarily practices in insurance litigation of various types, also construction litigation.

Those are especially hot practices considering the last four years in the climate both in West Louisiana and over here in the southeast part of the state.

You know, your insurance company's job is to pay claims, but ultimately, insurance companies don't get to be the size that they are by paying out more than they take in.

So after disasters, they're faced with some difficult choices which are are we going to operate fairly and pay all these claims or are we going to try to see maybe how we can cut some corners or see how we can save some money?

And ultimately saving money in this context is not paying out a claim that's owed.

We've experienced something a little bit unprecedented in Louisiana, at least one precedent in recent history with regard to many insurers going bankrupt.

And so Americaas, Lighthouse, Southern Fidelity on and on and on have gone bankrupt in the last two and a half, roughly years.

But essentially what happens is the Louisiana Insurance Guaranty Association or LIGA, as we call them, takes over the claim.

And they're sort of the the safety net fund for the state of Louisiana.

Anyone whose insurance company goes bankrupt, their claim then sort of transferred over to becoming legal responsibility.

And then hopefully, if everything works correctly, LIGA takes a look at the claim and then LIGA pays as though it was your insurer.

Obviously, with the explosion of bankruptcies, the need for life get a step into claims is as high as it's ever been, or at least as high as since the business.

Katrina unfortunate, at least as much as we would like to be able to work out all the claims of LIGA, we've not experienced a ton of success mediating them or resolving them pre suit and frankly, resolving them.

And as we sit here today and so from our perspective, it doesn't appear as though there's been much of an appetite for LIGA to actually settle these claims.

It's a shame because I think a lot of these claims can probably be resolved in relatively short order if they were just sitting down and taking it seriously with the manpower that they have.

My assumption would be they could be resolving hundreds of claims per day.

No one who's a serious person can look at New Orleans, Louisiana as a great example.

I live here, so I'm not being overly critical, but can look at our infrastructure and say, Hey, it's all looking great.

And part of that is government dollars.

Part of that is our own insurance issues, part of its construction code.

But I'll tell you, what's certainly not going to help is every homeowner getting underpaid for their insurance claims, because then you're going to get cobbled together, poorly done or not undone, work on all these houses.

So I think you're looking at a scenario in which we're going to have a perpetually cobbled together hodgepodge mess of construction because people are not going to be able to pay to do it correctly.

And that's something I think we need to seriously consider what sort of society we're going to live in here in Louisiana, because these storms are not going away.

I mean, every bit of data suggests that hurricanes are going to continue to increase in intensity and possibly also in frequency, which, you know, is frightening to think about, but also a cautionary tale to say, what are we going to do about it as citizens here in Louisiana, as policyholders, as voters?

How are we going to address these issues that we're staring down the barrel of?

We are lucky to have some of the key policymakers and experts when it comes to insurance.

Here with us in studio.

We have Senator Kirk Talbot.

He represents District ten and River Ridge and is the chairman of the Senate Insurance Committee.

We have Representative Matthew Willard.

He represents District 97 in Orleans Parish and is a member of the House Insurance Committee.

And we have Andreanicia Morris.

She is the president of Housing Louisiana, a statewide initiative aimed at meeting Louisiana's affordable housing needs.

Thank you all so much for joining us here to discuss this very important topic.

Senator Talbot, we're going to start with you and your work on the Senate Insurance Committee.

What are you currently focused on this session to stabilize the home insurance industry?

Well, the main bill that I'm doing to do that is a bill, Senate Bill 323, that that clarifies and streamlines the claims process.

I think everybody will will agree.

I think that the claims process we have is not a great one for policyholders.

We do not have a written proof of loss in Louisiana, which most states I think almost every state has.

I have that in my bill.

And that's important because that that proof of loss is what starts the time period of the 30 day time period where they have to pay your claim.

And if they don't do it in 30 days, then that triggers penalties and attorney fees and so on.

So we're trying to bring some clarity to that for, you know, the insurance companies manipulate that in their favor and plaintiff attorneys manipulate that in their favor as well.

And it's the policyholder that gets stuck waiting for a check and waiting to get their home fixed.

So I think that process will be better for the policyholder and provide more clarity to insurance companies that have told us commission.

I have have traveled to London, met with with Lloyd's of London, folks, and they're like, look, if you can clean up that and clarify that claims process, we'll we'll start coming back.

And other companies will be attracted to Louisiana, which I think will stabilize the market.

Well, we will certainly be watching that key piece of legislation.

Representative Willard, I want to ask you, you represent Orleans Parish, which has seen a dramatic change in access to affordability of insurance.

What are you hearing from people in your district about how this crisis is affecting them?

It's heartbreaking.

The stories that I hear from constituents, family members, friends resemble the stories that you played today.

People are in a situation where they have to make a tough decision on whether they want to try to stay afloat and remain in Louisiana or if they should move out of state.

And these are very difficult choices because in many instances, especially in the city of New Orleans, you're talking about families who are in generational homes, the home they grew up in, the home that their grandparents grew up in.

And now because of their increase in their premium, they cannot meet the new escrow monthly payments to keep up with their mortgage.

And when you have a rate increase of 50%, 100%, one of the stories you played today had 300% increase.

You can't stomach that.

It's impossible to budget for that.

And so people are hurting.

We know that Louisiana is losing population, especially around our coastal area, which generates most of the revenue for the state, which is, you know, a high concentration of population for our state.

And if we can't address this crisis in a way that will provide greater competition and rate reductions for premiums, then we will continue to exacerbate a population loss in Louisiana will not be the same.

Anthony, are you echoing what Representative Willard is saying in terms of what your organization is hearing and dealing with?

Yes, absolutely.

We're hearing these stories routinely, not just below I-10, but also across the state.

That's one of the things that we want to make sure that people are aware of.

Often when we think about housing, affordable housing, folks jump to subsidized housing.

They jump to the needs of people that have been hit, hit by hurricanes.

But across the state, we're out.

We're seeing this as a challenge.

And affordable housing simply means you're not spending more than 30% of your income on your total housing costs.

There isn't any particular kind of affordable housing.

And based on those numbers and what we've seen so far, most people don't want to spend more than 30% of their gross income.

That's the calculation.

We heard today someone who's spending 60% of your take home.

That's not affordable for anyone, no matter how much money you make.

You don't want to spend 60% of your take home on your housing costs.

Yes, your utilities.

That's your mortgage.

That's your rent.

We're seeing people get pushed out of their communities at every income level, not by choice, but because they can't afford it.

Representative Willard, you wrote and passed a House bill to 94 last year, which created the Fortified Roof program, a one possible solution to helping lower rates and encourage home insurance companies to write policies.

The program launched It's out of money right now.

Hopefully we're going to renew it.

Where are we at with that program?

So I believe the funding for the Louisiana Fortified Roof program currently has 5 million in the budget.

And I know the new commissioner, Tim Temple, is advocating for about another $14 million.

Just to put that in perspective.

Last year, when I passed the bill to provide for the actuarially justified discount, the reason I did that was I thought if the state was going to invest taxpayer dollars into a program to help alleviate the insurance crisis, we should get some return on our investment.

In the return would be a discount in premiums, making it easier for people to remain in Louisiana.

When we funded the program last year, we put forward $30 million and essentially that was going to be a test case, a pilot launch of the program.

Well, this year we're advocating for less money than we put in in its pilot year, $20 million, $30 million.

That's not enough to cover my district, just my district alone in the city of New Orleans.

It's going to take a lot of money.

So I would really like to see the legislature prioritize increased funding to the fortified roof program, because today that is the only thing a homeowner can do to reduce their premium.

And we should point out, this is one time funds.

We.

Right.

And we also should point out that even with the 30 million, that's just a small drop in the bucket to fortifying roofs to a level that will substantially reduce the risk and make the state more attractive to policy.

The way it works is if you're approved, you get a $10,000 grant for from the insurance department, from the state, to put a fortified roof on your home.

The fortified roof can cost anywhere from 24 to $12000 to, you know, it could it could run you over 20 grand, depending on the size of your roof and the type of roof that you have.

But it's a significant investment from the state.

And so I think it is a good it is a good program that we need to continue to fund.

Whether it's one time dollars right now, that is okay, because that will give us another year of operation for this fortified roof grant program.

Ideally, we would like to identify a source of recurring funding.

That way we have a stable source of funding to operate this fortified roof grant program for the foreseeable future, because one of the best investments that we can make as a state is rebuilding our housing stock to where it's more rugged and more durable and more weather resistant.

So, Senator Talbot, beyond the fortified roof program, are there any other initiatives being considered or that should be considered that can help mitigate the risk and make Louisiana more attractive to policy riders?

Well, let me point out, I appreciate his his work on the Fortify Roof program.

You know what?

I can't think of a better way to spend taxpayer dollars than the fortified roof program.

I know the commissioner is working on a process to have a dedicated funding source, maybe assessing the insurance industry for that, which I think makes sense.

The building codes, the Code Council has increased the building codes.

Last January of 2023 and they increased them again in the spring of 2023 to put us almost at the fortified roof level.

Some states, like Alabama, who has taken the fortified roof program to great heights, don't even have a building code, statewide building code we do.

So if you're building anything new construction moving forward, it's pretty much already at the fortified roof level.

But, you know, since your question, you know, what else can we do?

I can't file a bill.

I don't think anybody can file a bill that will reduce your rates.

The way you're going to get your rate reduced, in my opinion, is two things.

Getting a fortified roof or when an insurance company offers you the same policy you have now with a different company at a cheaper rate.

So we've got to find a way to attract insurance companies to come here without jeopardizing, you know, the rights and the process of policyholders, which I am and which we all are.

You know, I may have a claim one day.

I don't want to do anything that's going to inhibit my ability to get my claim paid either.

So those are things that we're working on to do that to increase competition, which I think is the only way to really lower rates.

Someone opposed this group to the panel.

What is the feasibility of implementing an alternative insurance model such as a public private partnership or catastrophe?

Bonds to spread the risk and stabilize the market?

And this is up for anyone who wants to raise their hand first.

I'll go, okay.

So, yeah, the that's a political will question and that's a great question to ask with these gentlemen here, because it is feasible.

It is something that we can do.

It is something that the commissioner has talked about.

It will take a lot of work.

It's got to be something that's likely going to be done over multi states and it's going to take some time.

So what do we do in the meantime?

We've got to make sure that we're investing in the people of Louisiana.

I think one of the problems that we have fundamentally with some of the framing is we're talking about how to make insurance insurers more excited and eager to be here.

We've got to make sure that this market, we're mitigating risk for the people of Louisiana and then the insurance companies will come.

Once we have done that, we have to make it safe and affordable for the people here.

We were part of the initiative to bring about the new building codes.

I will tell everybody at this panel, though, construction is at an all time low because of insurance costs, because you have to operate a building once you've brought it online.

And just because you're single, building in a community in a neighborhood is built to these higher standards.

That doesn't mitigate your risk If your next door neighbor's house hasn't had a new roof in 20 years, if it blows off into your building, into your home, your insurance company is going to be looking at that.

We are not isolated.

We are communities.

And that's how we have to look at this.

So looking at higher level initiatives, once we get the people of Louisiana stabilized, we absolutely think that's the path forward.

So Representative Willard, I saw you wanting to answer this.

Public private partnerships.

Your thoughts on the feasibility of that?

I think we we are in such a state of a crisis that we have to consider all options.

Over the last couple of years, one thing that I have contemplated is a catastrophe fund.

The state of Florida has that in the way it would work is the state puts up money into a dedicated fund that insurance companies could use to purchase reinsurance.

One of the issues that is driving the unaffordability of homeowner's premiums in Louisiana is the cost of reinsurance.

So a lot of the smaller and medium sized insurance companies have to essentially purchase for their coverage to make sure that in the event of a catastrophe, they can pay out the claims, something that we did that kind of didn't happen a few years ago when we saw so many companies declare bankruptcy.

Right.

So the way the CAT Fund, as it's referred to, would function is these insurance companies could purchase reinsurance directly from the state at a cheaper cost.

And so that is one thing that I have been contemplating.

The the major obstacle to it is it needs an upfront funding.

And I think outside of something around 50 or $100 million wouldn't really be feasible and really wouldn't meet the demand that is required in the state of Louisiana.

But I've talked to stakeholders about it and you know, maybe in the next year or two we'll see legislation to try to go after that, because I think that would be a good investment.

So, Senator Talbot, your thoughts on that?

Absolutely.

You know, we've we've talked about that, and this might be a good time to ask you if you want to coauthor my study resolution on cap funds, because we're going to do one to to study this in the office on the off session.

And, you know, but Matthew's right, The obstacle is the infusion of upfront cash and not having a storm the first several years you start that fund because we're not a we're not a big state, we're not a wealthy state.

Florida did it.

And, you know, they went the first four years without having a storm.

So once you get over that hump, then you have, you know, money built in where you can withstand a major event.

But that's kind of the risk you take.

I think we kind of departed on the water, but but he's right.

I mean, that's the problem is, is the reinsurance levels are what is keeping companies from writing here and in other states that used to be an unlimited amount of money around the world is a global market and it's just not anymore.

The reinsurers have really taken on the chin in the last ten years, and they're just being very picking and choosing.

They put their money.

So I think a cap fund is definitely something when you take a strong look at.

All right, Well, this is really valuable insight and some great possible solutions on the table.

I wish the three of you tremendous luck and progress, especially with the recession underway.

Thank you all so much for joining us and sharing your expertise.

So next, we will hear from a real estate agent based in southeast Louisiana who's had to change some of her business practices due to the insurance crisis.

Here's what she had to say.

My name is Whitney Jones.

I'm a real estate agent and I'm from Baton Rouge, Louisiana.

So between July 2021 and September 20, 22, 11, homeowners insurance companies became insolvent and left the state of Louisiana as a result of the increase in homeowner's insurance claim.

I believe the number is close to $76.5 billion in damage happened to homes between all of the hurricanes that happened in 2020 and 2021.

The difference between then and now is before in 2020, you could put in an offer before getting insurance quotes.

Now I refuse to put in an offer before checking the homeowner's insurance in the flood because the effect on the monthly payment is astronomical.

I had a client that went to go look at a house.

New construction house, like literally new build, new roof, new everything.

And between homeowners and flood, I believe that was an additional 50 $500 a year.

So that brought her up like five, $600.

So me personally, it's affecting me in the fact that I believe in being honest with my clients upfront and letting them know what their monthly note is going to be.

So you have to pull the homeowners and flood quotes before you even put in the offer, which in a multiple offer market, which we're starting to get to, gets you, you know, it makes you a little bit less competitive.

And typically, the hottest time of the year is spring and summer, which is when most of the houses are sold.

Last year around those homes, markets like New Jersey and Iowa and New York were in multiple offer markets, whereas in Louisiana, we were a lot more slow.

And I feel like that's as a result of our homeowners insurance and flood insurance being so high.

And the Orleans Parish, Jefferson Parish area is really, really hard to get insurance.

Insurance is ridiculous.

They're still selling, but it's it's a lot harder.

Houses are sitting on the market for a lot longer because we had a lot of investors move in to Louisiana and now they're actually starting to sell their rentals because insurance has gone up.

It's not as profitable as it once was.

We've had, what, three, almost two, almost three years of no hurricanes.

So as soon as we go, a couple more years without some hurricanes, some more insurance companies will come back to the state and want to insure people.

But as of right now, it's just a temporary thing.

I do think that it will get better, but it might be a while.

But as we go time with less storms, insurance companies should come back.

We are back with a new panel to explore these issues further.

We have commissioner of Insurance Tim Temple recently elected and comes into the job with over 20 years of experience in the insurance industry and a big job to tackle.

Mind you, we also have Benjamin Albright.

He is the president and CEO of Independent Insurance Agents and Brokers of Louisiana, which is a members based trade association that serves more than 350 independent insurance agencies.

And also joining us again is Andreanicia Morris.

She is the president of Housing Louisiana.

Thank you all so much for joining us today to share your insight and your expertise.

Commissioner Temple,, we'll start with you.

So we are in the midst of a legislative session.

We have quite a few pieces of legislation proposed aimed at getting a handle on the insurance crisis.

What are some of the bills that you support and that you see as possible solutions?

Sure.

Appreciate the opportunity to be here today.

And I'll tell you, first, I need to make sure and state that all of the legislation that's being presented that's being proposed is designed to craft and make Louisiana a more attractive marketplace.

You know, the series of this priced out, that's exactly what's happening.

People are not able to afford insurance.

A lot of the solutions you're hearing are being pushed back about, not about trying to impact the price, but what is it, do you know, as far as filing a claim later down the road?

So I want to make sure we put the focus first and foremost on on the pricing, on the availability and affordability.

So three kind of big pack, big items I think we're looking at.

One is we have a bill that's going to address the fair claims practice, and it's designed so that when people a claim as a result of a hurricane catastrophic event, that those acting in good faith, both the insurance company and the claimant, have an easier way to that process and navigate the claim.

It's sometimes very burdensome and complex.

So we're trying to make it easier for both parties to it to with the result, to get money in the pocket the claimant as soon as possible.

Another bill is a three year roll.

It's I'll tongue in cheek.

It's a little unpopular to address it.

A lot of people think that it's a consumer protection.

The previous commissioner was a big champion of it.

My position is that it inhibits insurance companies from wanting to come and do business in Louisiana as well as it inhibits companies that are currently here that have books of business for managing their portfolio.

At the end of the day, I want insurance companies free market just like every other business that we promote in our state.

And then we've got several more an appraiser bill to my belief is that people don't want to litigate against their insurance company.

They tend to do it as like last resort.

There's an appraisal process that consumers can use.

And Louisiana, it's a it's not real defined.

And so we're trying to bring some definition, some clarity around that just for clarity in simplistic terms, the three year rule means the three year rule is effectively once an insurance company has given you three renewal offers on your property, on your homeowners, they are bound to continue to give you a renewal quote as long as they do business in Louisiana, but for a very narrow set of circumstances.

You know, like I said, it's couched as a pro-consumer because, you know, I think the presumption is that you can't lose your insurance.

But I hear from people everywhere I go, I can't afford the quote I'm getting.

So if you're if they can't afford the quote that the insurance company is forced to give them, then what good are we doing, the consumer?

All right.

So, Mr. Albright, your organization represents hundreds of independent insurance agents and brokers across the state.

What are you hearing from them about causes and possible solutions to the crisis?

Yeah, absolutely.

So I would echo with what Commissioner Temple said, that affordability and availability are the two fundamental issues that we have to address.

There are not enough insurers that want to right business in our state, and that means that there's no competition.

And so the price is out of control and people cannot afford the policies that are available.

And I would say that as far as causes, there's those are the two things that we really need to address.

One is the loss costs.

The costs to do insurance in this state is very expensive.

I've heard some people say, including on this program already, that insurance companies don't get to be billion dollar companies with by paying lots of money out to insureds that they do it by trying to pay as little as possible a Fundamentally, that's just not true in Louisiana.

At the end of the day, on the homeowners line of business, they paid out $9 billion in Hurricanes Katrina and Rita.

The whole time.

Between that and 2020, when you had Laura, Delta, Zeta, Ida, and those huge amounts of claims they made back six and a half billion of that.

So they're still three and a half billion dollars in the hole from Katrina and Rita.

When you get to the $13 billion that they paid out for Laura, Delta and Zeta insurance companies are not profitable writing business in the state.

And so that's why they don't want to do business here.

The second thing is that they don't want to do business here, and that's because our laws are very different from a lot of other places.

We have laws in Louisiana, the three year rule being the primary example where we're the only place that has a law like that.

And it is a problem for insurance companies.

They want to write business in all 50 states.

The kind of insurers that we would love to have are the big national guys that write everywhere.

They don't want to write here because we do things very differently and make it more difficult on them than anywhere else in the country.

So those are the two things we need to fix.

Fundamentally.

We need to make insurance cheaper for the companies so that they can make it cheaper for the policy.

And we need to make it attractive to where more insurance companies want to do business here.

This brings up an interesting point.

You know, insurance companies come here, some invest in insurance in other areas and they make quite a bit of money.

They're not making money right now.

And homeowners.

Why not come up with some sort of mandate that if you want to write for oil and gas and Marine, that you must write a portion of homeowners?

I'll jump in that and say mandates cost somebody.

Any time you create a mandate, someone pays for that mandate.

But then telling companies that they have to come here and write business because they're writing another piece of business is, again, it's not free market.

And if Louisiana goes that route, I think we would be the only state that would do that.

And again, that does not incentivize companies that want to come and put their investors money at risk, to put their shareholders money at risk.

It's bad policy.

I would also add that in the same way that you don't necessarily a oil and gas company to build you your house.

You don't necessarily want an oil and gas insurer to insure your house.

There are two very different skill sets and forcing one company to do both is not necessarily an effective solution.

And your naked your thoughts Yeah.

What's your but you're talking about to bend with that is there big companies like AIG, for example that have diversified portfolios that also do homeowners in other places and insure petrochemical companies here in Louisiana?

We do need to spread the risk around.

We do need to share the risk.

And we also need to talk about investing in strength in these communities.

Gentlemen, you're talking about doing things for the market, for the for the insurers.

I still haven't heard how that's going to benefit the homeowners to it.

They they need to be first.

The people of Louisiana need to be the point.

And your businesses, the companies that you regulate, get to help us and they get to make money doing so.

We need to have a stronger market that they can make money in.

But that starts with a market that we can live in.

So therein lies the challenge.

Achieving that delicate balance right, Making Louisiana attractive for insurance companies to come in here and write policies, but at the same time protecting the consumer and providing them with a product they can afford.

Because what happens is we're in a merry go round.

Consumers are priced out of getting insurance and up on citizens the very place we're trying to get them off.

And so we go round and round.

The balance is the challenge.

How do we do this?

How do we achieve that balance?

Making Louisiana attractive to insurance companies and consumers and keeping them off Louisiana citizens?

Right.

And I think that's just at balance.

And right now it's out of balance.

There are not there's not the the the availability of companies that were writing here prior to the storms coming.

And look.

Yes.

Do storms are they more intense?

Yes.

Do they do you have rapid intensification?

Yes.

You know what causes that?

That's not my department.

You know, I'm in Department of Insurance.

But you do know that climate change is real.

We've you said that before.

I do not talk about the fact the insurance companies know it's real.

And I said that climate change is is changing.

The climate does change.

And insurance companies are trying to model and predict what they can.

They're not.

But they're looking at the future.

They're not looking at what cost.

And so no, but I agree with you, the consumers, the people, the very citizens that run our state, our economy need to have affordable insurance.

I agree fundamentally with everything that both of you were saying.

It is absolutely true.

The climate is changing to where storms are more frequent and more severe.

It's also true that we need to balance, you know, having a insurance companies are not charities.

They have to make a profit to want to do business here, and they're not making a profit right now.

So we do need to balance those things and they have to more profit to pay claims.

Exactly.

And what I would say is that the difference is that if you go across the border into Mississippi, you're going to pay significantly less for your home insurance than you do in Louisiana.

Two identical homes, one in Louisiana, one in Mississippi.

Ah, and same distance to the coast.

You're going to pay much more in Louisiana than you are in Mississippi.

And that has nothing to do with climate change.

That has nothing to do with anything else, because they have the same climate risk that we do.

The difference is that we have laws, we have regulations, we have litigation issues that do not exist in other places.

And we need to balance that out in addition to building better.

They are also not starting with a severely compromised housing stock and building stock because Hurricane Katrina didn't hit them the same way that it did they did here in Louisiana.

And they also saw significant investment from the federal government, managed correctly in, their housing stock.

We did not see that in Louisiana.

That's also part of the difference.

That's also a big part of it.

The housing stock here is more compromised than it is in Mississippi.

Do we start up do we have legislation in play that addresses that very issue?

I mean, we know we have things like Fortified roof, right, that we're trying to fund.

Again, to help people strengthen their roofs.

Do we have any other initiatives at play that will address that very issue?

Well, there are bills that are that will work their way through the process, that are addressing building codes.

You know, we've, you know, a large portion of our population lives in proximity to the coast.

Therefore, a large portion of our insured properties are in proximity to the coast.

So we need to make sure that as new homes go up, that they are built to the most current resilient building codes.

That's a long term play.

I agree with you.

They need to have safe homes, but that's not an insurance only fix.

I mean, that's that's that's a state wide issue.

I mean, that impacts all of us and I'm not a politician, so I'll even go a step further and say that I think the insurance industry would wholeheartedly support any money that the state chose to invest to upgrade the housing.

And they are.

So I want to hear some of your thoughts on possible solutions.

I mean, being on the insurance side of this, what do you see as some solutions from you stand?

Absolutely.

So one of the largest things that we need to do is continue to build better homes.

I will emphasize that again and again and again.

But again, we also need to bring ourselves in line with other states.

We don't have to be revolutionary.

We just need to bring ourselves to average because we need to be similar enough to other states where it's easy for insurance companies to come in and do business.

We can't be unique so that they have to completely revolutionize their business model just to do business in our state.

The governor, Jeff Landry, in his opening address to the legislature, alluded to the fact that he thought less regulation in the insurance industry might be a solution to make the market more attractive.

Where do you stand with insurance companies coming to you to ask for a permission to hike their rates?

Where are you?

Where are you in this?

Right.

And I think you're referring to deregulation, deregulation.

And people like to use deregulation as a bad term.

And it's not I mean, again, we want to make sure that we're using as a attractive marketplace.

And it starts with what are the regulations?

And if you start comparing them to neighboring states, we have been very onerous for the last several years.

And so I'm not advocate for deregulation at the expense of the consumer.

I'm still charged with taking care in protecting the consumers the end of the day.

But what we're doing is trying to promote a more healthy, competitive environment in Indonesia.

What are your thoughts on more deregulation?

So part of the problem is, as I've said earlier, I think we're going about this backwards.

The cart is behind the horse.

You know, it's we've got to put the cart in front of the horse to get this moving correctly.

And that starts with the people of Louisiana.

We have just seen some startling information about population loss.

This is directly related to housing unaffordability across the board.

The problem is, is that we're starting with the wrong part of it.

We're in order to make insurance insurance companies more interested in being Louisiana.

In Louisiana, we've got to let them file and file for an increase whenever they deem it necessary.

It may even be financially justifiable under their business model.

That's inherently the wrong way to start this.

We shouldn't be starting their.

We have to start with making this market more reasonable to live in.

We've got to mitigate the risk.

That's what that's what these insurance companies are talking about.

There's too much risk in this market.

There's too much damage.

The housing stock, the building stock, it's not in great condition.

And I would say that the insurance companies over the last 20 years has certainly played a part in that with how they have paid claims, how people have been killed in time to death.

But we are where we are and starting with the people, we've got to start with their housing and then we can talk about making changes to the market and and attracting more insurers.

This doesn't make sense to it, does it?

It doesn't make sense to the people that they wouldn't be the beginning because their needs are so severe and so significant.

They're not ready for the next disaster.

And letting insurance companies to just jack up the rates isn't going to get them any more ready.

I want to ask a personal question.

We're all citizens of Louisiana.

We know outmigration is problem.

Are we concerned at all that the insurance crisis is pricing people not only out of their home, but out of the state?

Most certainly.

I mean, if you look at the southern states, you know, all the other southern states seem to be growing, you know, the regional.

But also look at a lot of the affordability.

It comes to insurance.

You know, I've said it a lot.

When you move from any state in America to Louisiana, your auto insurance just went up.

The same with your homeowners.

So that means the inverse.

If you move out of the state, you're saving money on your auto and you're saving money on your homeowners.

So, you know, the governor on down every every elected official that I speak to is concerned and focused on economic development.

What can we do to help revitalize the Louisiana economy, which I think helps address some of your concerns.

Miss Moore's, You know, but but if you can't afford the home, if you can't afford the car, we're we're incentivizing our citizens to not live here.

So it's like no matter what side you take, it's always a chicken or an egg or the horse horse in front of the car.

But, you know, again, through the lens that I look at and the seat that I'm elected to, it's about bringing availability and affordability.

I'll work with the rest of the legislature on all the other economic issues.

But from where I sit, I've got to make sure that we have balance and we can wish for and hope for affordable insurance all day long.

But that's not a plan.

Availability, affordability and balance sounds simple, but quite complicated.

I want to thank all three of you.

Commissioner Temple, Mr. Albright and Mrs. Morris for joining us.

I'd also like to thank our earlier panelist, Senator Talbot, Representative Willard and Mr. Riggs.

So what do you, our viewers, think?

We encourage you to comment on tonight's show by visiting lpb.org/louisianaspotlight and clicking on the Join the Conversation link.

We'd love to hear from you.

Thank you so much for joining us.

Good night for a copy of this program.

Call one 800 9737246 or go online to www.lpb.org.

Support for this program is provided by the Louisiana Department of Health working to improve disparities in health care and improve health outcomes for all citizens.

Information at ldh.la.gov