Jim Donelon, the longtime Louisiana Insurance Commissioner, announced on Tuesday that he will not seek reelection in October. The 78-year-old Republican has been serving as commissioner for a record 17 years and has been at the forefront of efforts to lower property insurance costs in the state. Louisiana has been grappling with a property insurance crisis, which has been worsened by devastating hurricanes in 2020 and 2021.
Over the past few years, a dozen homeowners insurance companies have left the state, and another dozen went insolvent following hurricanes Delta, Laura, Zeta, and Ida. As a result, thousands of residents have been forced to turn to Louisiana Citizens Property Insurance Corporation, which is the most expensive option.
Currently, the corporation has 120,000 residential policies, and the average annual property insurance premium has soared to $4,400. To entice more insurers to Louisiana, lawmakers have approved an incentive program worth $45 million. Under the program, qualified companies will be awarded grants of between $2 million and $10 million, and they must provide 100% matching funds for the grant. In addition, the new premiums that are required to be written by each company are at least two times that total amount. Nine companies have applied to the program, requesting $61 million in grants.
The state's insurance department is currently reviewing applications, and if all companies are approved, they would receive lesser amounts than requested in order to match the current $45 million available. Donelon has acknowledged that there is much work to be done during Louisiana's April legislative session to find long-term insurance solutions.
Comments