Louisiana’s property insurance crisis: What homeowners need to know

Why are insurance companies leaving Louisiana?

The troubles in the Louisiana property insurance market bear many similarities to those affecting Florida.

But unlike Florida, where high costs related to extensive litigation are cited as the biggest factor, Louisiana’s primary culprit is its vulnerability to hurricanes and flooding.

Since 2020, Louisiana has been struck by multiple major hurricanes, including Hurricanes Laura, Delta and Zeta in 2020 and Ida in 2021. The resulting insurance claims overwhelmed some insurers, particularly those that were relatively small. Other companies simply decided the state was too risky to continue to do business in and have pulled out.

How are Louisiana homeowners losing insurance coverage?

The story is a familiar one in hurricane-prone areas: as the risk increases and the cost of repairing damage follows, insurance companies are choosing not to renew policies. And some are going out of business.

As a coastal scientist with the Louisiana Universities Marine Consortium, Alex Kolker is intimately familiar with the damage a hurricane can wreak on the Gulf Coast state.

Even so, he didn’t expect to receive word that his homeowner’s insurance provider, Southern Fidelity, had gone bankrupt in early 2022, and that he would need to find a new provider.

Securing a new insurer proved difficult. He eventually had to settle for coverage through Louisiana Citizens, the state-run insurer of last resort. But it came at a high price – a nearly $2,000 increase to his annual premium, or about 50% more than his previous rate.

“According to the two insurance agents I spoke with, Citizens was my only option,” Kolker says. “Many people I know in my neighborhood were in a similar situation.”

What insurance companies are pulling out of Louisiana?

Worsening the Louisiana homeowners insurance crisis, the tally of insurance providers that have declared insolvency since 2020 includes Access Home Insurance, Americas Insurance, FedNat Insurance, Gulfstream Property and Casualty, Lighthouse Excalibur, Southern Fidelity, State National Fire Insurance and Weston Property & Casualty.

Those that have announced they will no longer write policies in the state include Aegis Security Insurance, AIG Property Casualty, American Reliable Insurance, American Summit Insurance, Bankers Specialty Insurance, Lexington Insurance, Maison Insurance, Republic Fire and Casualty, Unitrin Direct Property & Casualty, Union National Fire and United Fire & Indemnity.

What companies are writing homeowners insurance in Louisiana?

There are still many home insurance companies to choose from in Louisiana. Among the companies still offering Louisiana home insurance are:

Availability may vary by location.

Why is homeowners insurance so expensive in Louisiana?

The high cost of claims caused by severe weather, particularly hurricanes, has driven the Louisiana home insurance increase, along with inflation. As the cost of construction materials has increased, home insurance premiums also increase so that insurance companies can cover repairs.

Read our best hurricane insurance for 2024.

What is the Louisiana government doing to address home insurance prices?

In February of 2023, the Louisiana state legislature approved a $45 million incentive program aimed encouraging insurance companies to write new home policies and attracting new insurance companies to the market. It's expected to lighten the policy load on Citizens and reduce costs for homeowners.

A similar program, enacted after hurricanes Katrina and Rita, proved effective in the past.

What should you do if your home insurance policy is canceled?

Your insurance company is required to give you notice of cancellation so you have time to get new coverage. Here’s what you should do if your homeowners insurance gets canceled to avoid a lapse in coverage.

Begin by calling your insurance provider. Speak to a representative and find out if there is anything you can do to reverse the cancellation. If the provider has gone under, it may not be possible.
Get some quotes. Even if you are able to resolve the issue with your current insurer, this may be an opportune time to look at other options.
Complete repairs or make the required upgrades. It may be your insurer is threatening to drop your policy because it has an aging roof, old wiring or other factors that are making your property too much of a risk. Taking care of this work will be helpful regardless of how you proceed.
Don’t leave it until the last minute. Getting coverage in place might take time, and insurance companies are busy, so don’t wait.

Insurance Commissioner Donelon says the state is actively courting more insurance providers, but unfortunately more residents may be left scrambling for insurance in the meantime. His advice: “Start shopping now.”

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