Over the past two years, hurricane-related damage in Louisiana has put some insurance companies out of business. Homeowners are dealing with higher insurance costs.
LEILA FADEL, HOST:
Tens of thousands of people in Louisiana are struggling to get property insurance in the midst of hurricane season. Most of the big companies have stopped covering the state’s Gulf Coast. And smaller businesses are being put out of business after Louisiana has been hit by two major hurricanes in the past two years. As NPR’s Debbie Elliott reports, the insurance transformation comes amid a slow disaster recovery.
DEBBIE ELLIOTT, BYLINE: In Houma, La., the scars from last year’s Hurricane Ida look fresh. A grocery store in a shopping center is abandoned, its glass facade shattered. Signposts and gas station awnings have been torn down. And faded blue tarps cover the buildings.
JONATHAN FORET: The downtown area really took a beating.
ELLIOTT: Jonathan Foret runs the South Louisiana Wetlands Discovery Center in Houma, a city of about 30,000 people southwest of New Orleans. On a trip to meet with his insurance agent, he reflects on how the destruction has endured.
FORET: I thought it would be easier, but it’s actually had a more complex effect of driving by these things and seeing them broken and destroyed every day. It’s become more depressing than I thought it would be, you know?
ELLIOTT: His own house still needs repairs. There is a tarp on the roof of his kitchen, waiting for a contractor. Now, in the midst of hurricane season, he faces a new complication after his property insurance company goes under.
TRACEE BENNETT: Hey.
ELLIOTT: Your agent is Tracee Bennett at La-Terre Insurance Agency.
FORET: Okay. So this came in the mail. I just want to make sure this is all paid for.
BENNETT: One of them is special.
BENNETT: So these are like the new Citizens policies. So these are the…
ELLIOTT: Citizens is the state’s Louisiana Citizens Property Insurance Corporation.
BENNETT: Right now, we still have people with damage from Ida. So if you have an open claim or damage that you are still repairing, Citizens is the only option we have.
ELLIOTT: Your office has struggled to help hundreds of clients, like Foret, who have had their insurance companies go bankrupt or not renew policies offshore.
BENNETT: I’ve been in insurance for as long as I can remember. And that’s really the low point of where I’ve seen it.
JIM DONELON: It’s a crisis.
ELLIOTT: Jim Donelon, Louisiana Insurance Commissioner.
DONELON: Probably a little less than Katrina and Rita, but pretty close.
ELLIOTT: After those devastating storms in 2005, most of the major national companies stopped offering wind insurance in south Louisiana. The state turned to about 30 regional companies to fill the gap. But after losses of $22 billion from Category 4 hurricanes Laura in 2020 and Ida last year, some companies overdid it.
DONELON: Unfortunately, half a dozen of them have now gone on trial.
ELLIOTT: Donelon is among 140,000 Louisiana homeowners affected. He says about half of those policies were taken over by other companies. But the burden falls on Ciutadans, the state insurer of last resort.
DONELON: They’re absorbing it, but it’s not pretty, as we speak, because they’re being flooded.
ELLIOTT: Ciutadans expects to have tripled its number of policies by the end of the year. And these government policies are more expensive than private insurers, whose rates have also risen. Adding to the pain, flood premiums are also on the rise. Insurance agent Tracee Bennett.
BENNETT: I can tell you, down here, it’s been crippling. Between that and that, that hurts.
ELLIOTT: Houma, Louisiana, is a mostly working-class town in Terrebonne Parish, a bayous-lined region that leads to the Gulf of Mexico at its southern end. People work in the oil and gas industry, ports and seafood. The median household income in Houma is about $45,000. Jonathan Foret says that doesn’t leave much room to deal with higher insurance costs, layered with inflation, hurricane recovery and the ongoing threat of climate change.
FORET: We are there. Like, we’re at it in a way that’s going to prevent people from being able to live on the coast.
ELLIOTT: You can see it in south Terrebonne, where schools and fire stations remain out of service. Dozens of homes are abandoned and look the same as they did a week after Ida hit, roofs torn off and furniture scattered among the wreckage. Alex Kolker, a professor at the Marine Consortium at the University of Louisiana at Cocodrie, says the higher costs of cleaning, rebuilding and now insuring could transform these cities.
ALEX KOLKER: I think it makes these areas much more difficult to live in and more difficult to have the kind of community that people would want to live in. So I think you look at, you know, the possibility of climate migration and people moving somewhere else.
ELLIOTT: Kolker says what’s happening here should be a wake-up call.
KOLKER: The real problem is that it’s not just a few isolated people in rural Terrebonne Parish. It’s just that this could be happening to so many people across the country in the not too distant future.
ELLIOTT: Fannie Celestine’s(ph) experience after Hurricane Ida shows how people are displaced from their communities in a disaster. His public housing apartment in Houma was condemned after Ida. He is 59 years old and has lost almost all of his belongings.
FANNIE CELESTINE: It’s kind of hard to talk about it without crying.
ELLIOTT: Because of the housing shortage near the coast, Celestine lived for months in a hotel a hundred miles away in Lafayette before moving into this FEMA trailer closer to home. It is located in a secluded gravel field far from the city with no public transport.
CELESTINE: It’s a place to stay. But I’m from Houma. And I’d like to go back where I’m from. Transportation, I don’t. have this
ELLIOTT: She’s tired of depending on relatives to take her to the doctor or shopping and longs to get back to normal life, so does Jonathan Foret. And he sees a literal sign of normalcy on the back of a tractor-trailer rig.
FORET: Look; it’s a Mc’Donald’s sign. What? I mean, we can’t get insurance. But, look; they are replacing the Mc’Donald’s arches, the golden arches (laughs).
ELLIOTT: After nearly a year of seeing hurricane-shattered golden arches on the corner, this repair gives him some hope that things will get better.
Debbie Elliott, NPR News, Houma, La.
(GOOD NIGHT OF OATMELLO AND THE “GOOD NIGHT”)
NPR transcripts are created on a fast deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authorized record of NPR programming is the audio record.