Commissioner of Insurance State of Louisiana Jim Donelon
Many Louisianans with National Flood Insurance Program coverage are alarmed at potentially huge premium hikes under FEMA’s new Risk Rating 2.0 plan. State Insurance Commissioner Jim Donelon says this COULD stimulate competition from private insurers. Donelon said the rate increases will be devastating to homeowners and the Louisiana economy at large.
“Because it rendered tens of thousands of properties actually of no value. It renders them worthless because they can’t afford flood insurance which is a requirement of a federally backed mortgage,” Donelon said.
For those living in flood-prone areas, the increases in coverage could be literally unaffordable. Donelon says this leads to the possibility that private insurers could step up to compete with the FEMA-run National Flood Insurance Program
“A company could take an interest in writing such coverage in our state unregulated as it is but I would anticipate that it would be cheaper than what the federal government is proposing,” Donelon said.
Donelon says it cannot hurt for disgruntled property owners to try shopping around for lower-cost flood insurance.
“They can reach out to their agent or broker and see what’s available out there. As I mention it’s a very fall market at this time because of the dominance that the federal program has had,” Donelon said.
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