More than 40,000 homeowners are looking for new insurance policies after an insurance company dropped them, following similar moves by two other companies.
Southern Fidelity canceled 42,000 policies Friday, leaving Louisiana homeowners with 60 days to find new coverage, state insurance officials said. That brings the number of policies dropped since June to nearly 100,000 by Southern Fidelity, Lighthouse Excalibur and Maison, WVUE-TV reported.
Insurance Commissioner Jim Donelon said six companies have pulled out of the state completely and more than 50 have stopped writing new policies below Interstate 10 and I-12, making the state’s insurer of last resort, Louisiana Citizens, the only option for most.
"As we get further away and hopefully go unscathed through this hurricane season, more of those companies will return to the market, I am certain, as it happened 15 years ago after Katrina and Rita," Donelon said.
Southern Fidelity customers have until Sept. 13 to find a new policy or sign with Citizens. Lighthouse Excalibur and Maison have until Aug. 28.
Since the cancellations, Donelon said the number of Louisiana Citizens’ policies has jumped from 35,000 to 82,000 and he expects it to grow to 95,000.
Still, many homeowners with canceled policies have said the Citizens’ quotes they’re getting are simply unaffordable, like one Lafitte resident who was quoted $41,000, the television station reported.
"They need to to contact us ... because I can’t imagine any property having a homeowner’s policy at that price," Donelon said.
Residents in areas like Lafitte fear they will be priced out of their homes, the television station reported.
"I would tell them to do what our friends and neighbors over on the Gulf coast in Mississippi have been doing for the past 15 years, and that is to build higher and to build stronger," Donelon said.
Others who were not canceled said their policy renewals are tripling. A resident in one New Orleans neighborhood reports looking at a $15,000 renewal cost.
Donelon said many companies are realizing they’ve been underinsured.
"If it is an unreasonable increase in the insured value of your property, make an appeal to your company and get a contractor to give you an estimate of what your property in your area would cost to rebuild," Donelon said.