House Appropriations approves legislation that establishes a45-million dollar incentive fund aimed at attracting additional private property insurers to the state. House Insurance Chairman Mike Huval is an insurance agent in Breaux Bridge and says a similar program after Hurricanes Katrina and Rita helped revitalize the private property insurance market.
“So it gave me the ability to stay in business cause not only were there carriers that took up the incentives, it attracted other carriers to come also,” said Huval.
The bill heads to the House floor where it will be discussed on Wednesday.
Five companies took advantage of the Insure Louisiana Incentive Program in 2007, but Huval says it also attracted many other private property insurers who found Louisiana was a good state to provide coverage. But Houma Representative Tanner Magee says several of the new property insurers bailed after multiple hurricanes.
“We brought in companies like FedNat Insurance Company and Maison Insurance who didn’t do a good job of answering claims after Ida, didn’t pay claims,” said Magee.
Huval admits smaller carriers could not handle the super active 2020 and 2021 hurricane seasons.
Insurance Commissioner Jim Donelon says there are insurance companies who have expressed interest in writing policies in Louisiana if the incentive fund is created. But Jonesboro Representative Jack McFarland says the Independent Insurance Agents and Brokers of Louisiana are unaware of any of those companies.
“I find that a bit disconcerting that your group is unaware of any new company willing to come,” said McFarland.
Donelon says the incentive fund can result in more homeowners receiving insurance from a private insurer, instead of relying on much more expensive Louisiana Citizens Property Insurance policies. He says it could prevent thousands of people below I-10 from losing their homes.
“It’s much more than a band-aid, I call it a tourniquet so that it will stop the bleeding and get us to the hospital, to the emergency room,” said Donelon.
Donelon says long-term property insurance reform legislation could be addressed in the regular session that starts in April.
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