The New Orleans Levee Board said this week it would review other options for its excess general liability coverage from St. Paul Travelers when it discovered the insurer wants to charge almost eight times more than the current premium with a deductible five times greater, according to a story in The Advocate.
According to the news account, the board said claims arising from Hurricane Katrina would be covered by the board’s current policy, which expired Tuesday, Jan. 31.
The current policy written by Minneapolis, Minn.-based St. Paul Traveler’s caps the board’s total losses at $500,000 in a year. The board complained that there is no such stop-loss amount in the proposed new coverage from the insurer.
Two of the levee board’s floodwalls collapsed during Hurricane Katrina. About 80 percent of the homes and businesses in the city were flooded.
St. Paul was the only company to make a proposal for a new insurance policy. The policy covers a wide range of liability, from flooding claims to playground accidents.
Agent Randy Maddox of the Morrison Insurance Agency told commissioners he was surprised anyone would insure the agency.
Maddox told the board members that the coverage would come with a premium of about $1.4 million for a year, compared with the $163,000 paid last year. The current policy has a $50,000 deductible for most claims other than those connected to roads and bridges, while the new coverage would have a $250,000-per-occurrence deductible.
The agent added that he did not think another insurance carrier in the country would insure the board.
The old premium had the board losing only up to $500,000 annually in a coverage year. The new policy has no stop-loss level.
One board member said that the problem with getting other coverage proposals is that until lawsuits blaming the board and others for the flooding are decided by the courts he felt that no other insurer would even offer a proposal.
The board took no action on the proposal, reiterating that it will look at other options.