Louisiana is suffering a property insurance crisis, with policies becoming increasingly unavailable and unaffordable. Louisiana’s incoming insurance commissioner, Tim Temple, is pushing an anti-consumer agenda that raises rates and strips consumers of their rights.
Why rates are climbing, and coverage is diminishing
To fairly judge Temple’s proposals, it is important to understand the problem. Property insurers universally cite extreme weather as the reason they are ceasing to write policies in risk-prone regions, excluding coverage for specific weather events, and increasing premiums and deductibles.
Temple’s remedy is worse than the disease
Temple is pushing an anti-consumer agenda that will strip policyholders of their rights and result in higher costs and less availability for Louisiana consumers. Temple wants to:
- abolish or weaken the three-year rule, a consumer protection that prevents big insurers from dropping policyholders after three years. This measure would force even more Louisiana homeowners to purchase a significantly more expensive Citizens’ policy, as state law requires Citizens to set their price 10% above the private market.
- gut bad-faith laws, making it easier for insurers to delay and deny claims and nearly impossible for storm victims to hold big insurance companies accountable.
- allow insurance companies to raise rates more often, which Louisiana families cannot afford.
- permit big insurers to cherry-pick where they write policies, leading to coverage gaps and an explosion of expensive policies written by the state’s insurer of last resort.
Commissioner-elect Temple’s big swing and miss
Temple’s proposed agenda hurts consumers and fails to address insurers’ concerns about the risks posed by extreme weather. As a result, his plan will not attract new insurers, increase competition, or lower costs. Temple’s agenda benefits insurance companies already writing policies in the state at the expense of Louisiana consumers.
Again, extreme weather is driving Louisiana’s insurance crisis. Efforts to strip policyholders of their rights and further stack the deck in favor of big insurance companies writing policies in the state will not solve the problem. They will only make it worse for Louisiana families and small businesses.
To address the crisis, Louisiana must ensure that insurers operating in the state are financially solvent, acting in good faith, and the state must work to lower rates and reduce risk exposure through roof fortification and storm mitigation.
Ben Riggs is executive director of Real Reform Louisiana, a nonprofit organization of Republicans, Democrats and independents seeking accountability from insurance companies and large corporations on behalf of consumers.
