Donelon proposed setting aside $45 million for an incentive fund previously established by lawmakers, to entice up to seven insurers to start writing policies in Louisiana.
“Insurance Commissioner Jim Donelon has stressed that funding the Insure Louisiana Incentive Fund cannot wait until the regular session in April,” said Edwards. “I am grateful for the cooperation of the Senate President and House Speaker and the legislature in calling this special session focused on this Fund.
“While Commissioner Donelon says we must do this now, this is just a first step in addressing Louisiana’s ongoing insurance issues after the devastating hurricane seasons of 2020 and 2021, a crisis worsened by hurricanes and wildfires in other states in 2022.”
The special session will be held from January 30 to February 05, local Louisiana news outlet WAFB Channel 9 reported.
Edwards and Donelon’s concerns are not unfounded. Last year alone saw eight insurers go out of business, while several others had informed customers that they would stop writing new business in Louisiana. The surge of insured losses from hurricanes over the past years has also contributed to the state’s deteriorating insurance market.
So troubled is the home insurance market in Louisiana, that the state’s insurer of last resort Citizens Property Insurance is also being overwhelmed. Donelon last week explained that Citizens covers about 125,000 households – just over twice the estimated 65,000 it can realistically handle – and that consumers with Citizens are facing premium hikes of up to 63%.
Louisiana was recently ranked 10th most expensive state for home insurance in a national study conducted by Clearsurance. According to the study, the average insurance rate in the state for a $200,000 home was $1,736. By comparison, homeowners in Hawaii – the state with the most affordable home insurance rates – pay only $327 for a $200,000 property.