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Hurricane Francine, the sixth named tropical cyclone of the Atlantic hurricane season, struck Louisiana’s coast on September 11 and caused over a billion dollars in damage.
What’s happening?
Hurricane Francine made landfall in the Terrebonne Parish as a Category 2 storm, packing 100 mph winds when it blasted ashore. The storm was the third hurricane to strike the United States coastline this year.
There were no immediate reports of death from Francine, but it did cause extensive damage across the state. Flooding from Francine occurred in the Gulf Coast region, including parts of Louisiana, Mississippi, and Alabama.
Louisiana’s two main homeowner insurance policy providers are State Farm and Allstate, with local market shares of 22% and 14%, respectively, per Bloomberg. According to catastrophe modeler Karen Clark & Company, the cost to insurers will be around $1.5 billion.
Also, factoring in total damage and economic loss, the cost could be as high as $9 billion, according to AccuWeather and Insurance Journal.
Why are insurance costs from Francine important?
The Louisiana lawmakers passed legislation known as “the three-year rule” after Hurricane Katrina. It prevented insurance companies from dropping policyholders who had renewed with them in the previous three years.
In May this year, the state repealed the three-year rule to make it easier for insurance companies to drop some of their highest-risk properties. Those who supported its repeal were hoping to lure more competition from insurance companies back to Louisiana.
According to Insurance Business Magazine, Francine’s full impact on property and casualty insurers is unclear, but most of the losses were expected to be “absorbed by primary insurers.”
“It looks like we dodged the bullet more than we have on some previous storms of the recent past,” Independent Insurance Agents and Brokers of Louisiana CEO Ben Albright told NOLA.com. “This will not be a homeowner’s event, like Laura, Delta, Zeta and Ida.”
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Still, many will ultimately end up paying out-of-pocket damage to their property. Most private homeowner insurance policies do not cover flooding, according to FEMA.
What’s being done about the rising costs of insurance?
The United States was hit by a record number of billion-dollar weather disasters last year that caused $92.9 billion in damage, according to the National Oceanic and Atmospheric Administration. Hurricanes Francine and Helene will be added to this year’s growing list.
Homeowner’s insurance rates have risen rapidly in response to the mounting toll of these events. The biggest hikes in insurance costs are expected in vulnerable states like the Carolinas, Florida, Louisiana, Texas, and California, as maps from a recent Axios report show.
Learning more about how our overheating planet is increasing the likelihood of costly disasters can prepare us to not only help our family and friends learn about these issues but also enable us to take action.
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