Louisiana Democratic Gov. John Bel Edwards has called a Special Session to address the state’s growing property insurance crisis with a focus on implementing a $45 million incentive fund to attract companies to write new policies.
The week-long session will convene at noon Jan. 30 and must adjourn no later than 6 p.m. Feb. 5.
Republican Insurance Commissioner Jim Donelon has been lobbying hard for either the governor or Legislature to call the Special Session to fund the program.
On Friday he addressed the Joint Budget Committee, saying, “People are literally going to lose their houses if we don’t have a Special Session.”
Louisiana homeowners have faced dramatic insurance cost increases triggered by the vast damage caused by Hurricane Laura in 2020 and Hurricane Ida in 2021 if they’re able to find coverage at all on the private market.
The reduced availability has driven tens of thousands of customers to the state-sponsored insurer of last resort, Citizens, which last year increased rates by more than 60%.
Donelon said at least seven new insurers have told him they are interested in entering the market through the incentive program if it is funded and implemented.
The commissioner said that will help reduce Citizens’ rolls.
Donelon told lawmakers and Edwards, who had preferred to wait until the regular session beginning April 10 to address the crisis, that a delay would limit the effectiveness of the program because insurance companies need to plan for buying their own insurance to match new business before hurricane season begins in June.
“Insurance Commissioner Jim Donelon has stressed that funding the Insure Louisiana Incentive Fund cannot wait until the Regular Session in April,” Edwards said in a statement.
Donelon has conceded the incentive program is a short-term solution to the immediate crisis, but more must be done during the Regular Session when there is more flexibility and time.
“While Commissioner Donelon says we must do this now, this is just a first step in addressing Louisiana’s ongoing insurance issues after the devastating hurricane seasons of 2020 and 2021,” Edwards said. “We will continue to work on this issue during the Regular Session beginning in April.”
Hurricanes Laura and Ida generated a combined 800,000 insurance claims totaling $22 billion, causing eight insurance companies to fail and other companies to stop writing new business below Interstate 10.
The number of customers in Citizens has quadrupled during the past two years. By law, Citizens’ prices must be 10% above the highest market rate in each parish or the actuarial rate, whichever is higher.
Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1