42,000 Louisiana homeowners dropped by insurance company on Friday; State insurance commissioner addresses crisis

NEW ORLEANS (WVUE) — 42,000 homeowners are looking for a new insurance policy on Friday. Southern Fidelity dropped them and they now have 60 days to come up with a new policy.

Nearly 100,000 policyholders in total have been dropped by Southern Fidelity, Lighthouse Excalibur and Maison.

Insurance Commissioner Jim Donelon said six companies pulled out completely and more than 50 stopped writing new policies under I-10 and I-12, making the insurer of last resort the State, Louisiana Citizens, the only option for most.

“As we move away and hope to stay unscathed from this hurricane season, more of these companies will return to the market, I’m sure, as happened 15 years ago after Katrina and Rita,” Donelon said.

Southern Fidelity customers have until September 13 to find a new policy or sign up with Citizens.

Lighthouse and House have until August 28.

If you sign with Citizens, the cover will be retroactive to the day your policy was cancelled, so there is no gap.

Donelon says the number of citizen policies has increased from 35,000 to 82,000 and he expects it to rise to 95,000.

This overwhelmed the system, which has only two computer servers. That’s why those dropped policyholders were given more time, and Donelon says they found a quick fix by increasing a server’s capacity.

The word I’ve been hearing for two days is that it’s definitely better, although not perfect at this point, but what we’re certain of is going to happen now that this July 15th deadline is going to pass and people weren’t not aware of the 60 day extension before now. The rush will lessen,” Donelon said.

Many homeowners with canceled policies say the citizen quotes they get are simply unaffordable, like one Lafitte resident who quoted $41,000.

“They have to contact us at 800-259-5300 because I can’t imagine any property having a homeowners insurance policy at that price,” Donelon said.

Areas like Lafitte, where they see quotes of $24,000, fear they are overpriced for their homes.

“I would tell them to do what our friends and neighbors on the Mississippi Gulf Coast have been doing for 15 years, which is build higher and build stronger,” Donelon said.

Others who have not been canceled say their policy renewals have tripled. An Irish Channel resident reports he has $15,000.

Donelon says many companies realize they have been underinsured.

“If this is an unreasonable increase in the insured value of your property, call your company and ask a contractor to give you an estimate of the cost of rebuilding your property in your area,” Donelon said. .

Donelon urges anyone needing help with their situation to call their office at 800-259-5300.

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