re: Homeowners Insurance - good news

They take money from the state

Write policies

Storm hits.

They leave.

They did this after Katrina and Rita.

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No. That’s absolutely the case. Reinsurance contracted for the first time in many moons this year, partially due to higher interest rates, as investors can safely park money in vehicles getting 4% rather than risky reinsurance getting 8%. Also, reinsurance for many carriers/companies are reaching capacity due to rising rebuilding costs.

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I’m not saying that rising reinsurance isn’t leading to rushing insurance costs. That’s 100% true

I’m saying that the rising reinsurance costs isn’t the reason for our lack of insurance availability.

Our problem is availability. Carriers don’t want to write business here… at any cost. That problem is the same in the reinsurance market. But a lack of reinsurance capacity isn’t the whole story. Not all carriers have the same reliance on reinsurance afterall.

Of the fundamental steps needed
-Improve our building codes;
-stop forcing insurers to pay for things that aren’t covered (like evacuation expenses) —and imorove our litigation environment.

We have some serious issues to address of we’re looking at more stop gap gimmicks like we’re doing now.

Months ago when I heard UPC was leaving, I called my insurance agent. I was paying 2600 a year. They told me there wasn’t much hope for anything but Citizens and that my premium would likely triple. My policy was to expire in April. Well a few weeks ago the agent calls and says we have a quote from Cajun for $3800. So I was extremely happy for my premium to only be going up $1200. So people can say this is doing nothing, but for me it is. It may just be a short term solution but it saved me from possibly going up to 7 or 8 grand. Now I’ll just hope we get through another hurricane season unscathed.

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I know this sounds like a scary expensive and maybe even a socialist proposal, but why not convert LA Citizens into a FEMA Flood Insurance type program? Policies are written by private companies and handle claims and payout using their own funds for everyday claims for fires, burglaries, minor storm damage, lightning strikes, etc., but for catastrophic hurricane events over a certain amount, the state steps in with its reinsurance and disaster assistance from the Feds to help payout the claims for the private companies that wrote the policies.

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The state / Citizens can’t afford to do that. Citizens buys reinsurance for themselves and wants to get as many policies as possible OFF their books to reduce the financial risk to the state in the event of another Ida type disaster

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Spoke with a friend Friday that is an agent in Baton Rouge and he was getting slammed with calls for quotes. Something about one of the underwriters or insurers was pulling out of the state.

Didn't talk long or get details....he was getting calls and said "let me answer this"

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He’s probably talking about UPC. One of the biggest homeowners insurers in south LA. Writings been on the wall for months with them, but they finally officially went into receivership and liquidation at the end of February. So everyone with UPC policies has until March 29 to find another policy elsewhere

Out of curiosity......on a 450K dwelling, all brick, about what would the homeowner's premium be in Louisiana? That's what my home is insured for in Arkansas and I pay roughly $1500 per year.

Only reason I'm asking is because I see HO talked about a decent amount on here and on the OT. I know y'all have issues down there that we don't have to deal with up here, but I was just wondering what y'all have to pay.

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t does look like a viable short term solution

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Anything is better than nothing, but $45mm? Realistically, how many more policies will that cover exposure -wise?
A few hundred?
Maybe a thousand?
That’s a drop in the bucket.
I think it was nothing more than a photo op…

Any of y’all here write through Elevate? Apparently it’s only through Goosebead??

Thanks. It’s an option for us just not sure if it’s a good one company wise.

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That should help with Citizens pricing since they have to be more expensive than anyone else.

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If legislators wanted to fix something, this should have been the first thing to fix. This only makes Citizens cost higher. Citizens should have to follow the same rules and rate increase approval process private carriers have to follow.

Like I have stated in the past the problem is larger than what anyone can imagine at this point. As interest rates and insurance increase, mortgage and insurance are going to start negatively affecting the coastal communities.

I live in South Lafourche. Fortunately, I live in a small house that is valued at about 100k. The mortgage has about 42k left on it. The yearly windstorm insurance is about 2,000 this year and flood is 600 this year and will continue to increase to 3,200.

I have been tempted to move and sell the house before it becomes worthless, but I would like to keep it, since it will be paid off in a few years.

But in the future I could paying nearly 5 thousand a year in insurance for a house that barely cracks the 100k valuation.