NEW ORLEANS (WVUE)—Three years ago, Hurricane Ida barreled ashore and devastated southeast Louisiana, leaving many homeowners grappling with the impact on their insurance.
Jim Donelon, who became Louisiana insurance commissioner in 2006, was the state’s top insurance regulator when Ida hit on August 29, 2021, the same day Katrina made landfall in 2005.
On the eve of Ida’s third anniversary, Donelon reflected on what he was thinking when he realized another powerful storm would make landfall in Louisiana and likely cause significant property damage.
“Powerful indeed, in fact, at landfall, 150-mile-an-hour winds, almost identical to the year before, one day and the year before Laura, 150-mile-an-hour winds,” said Donelon.” Scary, the best news of all, unlike the 1,500 of our fellow citizens that lost their lives to Katrina, very few lost their lives to Rita, Laura, Ida, and the others.”
Still, Ida left behind catastrophic damage.
“I don’t have a breakdown separating Laura and Ida, but in that 12-month and one day period, 800,000 claims, totaling $14 billion in paid losses for Ida and $9 billion in paid losses for Laura, $23 billion-plus change for the combination of the two,” Donelon said.
Three years later, the insurance market in Louisiana remains challenging. Donelon was asked if he had sleepless nights because of the insurance crisis.
“Absolutely. And I was 79 years old and contemplating retirement and conflicted because of the ongoing crisis, but I was 79 years old, and I said, from my personal point of view, it’s time for me to retire if I’m ever going to retire and not die at my desk. And the other thing is, it’s also going to be longer than a quick year or two, or probably even four to recover it,” he said.
But before deciding against seeking reelection in the fall of 2023 Donelon fought for financial incentives to attract more insurers to the state. He also got the legislature to fund grants through the La. Fortify Homes Program to help residents harden their roofs against hurricane winds.
“I said in my last year in office that the quick fix was the incentive to get companies to come back, copied from what we had done after Katrina and Rita. The long term is what we are copying from Alabama, and that is fortified,” said Donelon.
Donelon long favored Louisiana’s decades-long rule that barred insurers from dropping policies. However, this year, the legislature repealed the law, and insurers will be allowed to begin dropping a percentage of their existing policies in the state in place for three years. But this year the legislature repealed the law and insurers will be allowed to begin dropping a percentage of their existing policies in the state.
“Well, it’s certain that they’ll take a slower approach, for one thing, the bill requires only 5% per year at max be non-renewed that previously had that three-year protection,” said Donelon.
Further, he said, “And number two, companies, where one company fears to tread another company sees an opportunity. And that’s the nature of the business. and that’s what is motivating Commissioner [Tim] Temple in his support for that effort,” Donelon said when asked about the matter.
He says reinsurance costs He urges residents frustrated over higher premiums and fewer insurance choices not topaid by insurers remain a factor but thinks the insurance landscape will improve.
He urges residents frustrated over higher premiums and fewer insurance choices not to give up.
“Companies are slowly returning to the market, and the recovery will happen,” said Donelon. “I truly am still optimistic that we’ll get through this, recover it, and be stronger for it,” said Donelon.
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