More Choices for Homeowners Coverage in La.

Homeowners in Louisiana have more choices for insurance than they did a year or two ago, the Associated Press and the New Orleans Times-Picayune reported. More companies are writing policies, and those that already were in the state are offering more coverage.

“Companies that heretofore had been curtailing are starting to free up on capacity,” said Don Beery, a partner with Eustis Insurance in New Orleans. “The ones we represent are more open for business.”

Insurers backed away from coastal Louisiana because so many claims were filed after Hurricane Andrew in 1992. Homeowners found it hard to buy additional coverage, and first-time buyers found shopping for the best deal almost impossible. In some areas, a state plan is the only choice.

Now, motivated by a desire for regional diversification and by changes in state law two years ago, companies are taking a second look at Louisiana.

Greater coverage is far from universally available. Some companies will write homeowner’s coverage only if they can also handle the consumer’s automobile and other insurance policies. Others will issue homeowner’s policies only in niche markets or in the less flood-prone areas north of Interstate 10.

Colonial Lloyd’s, a Texas-based affiliate of Lloyd’s of London, will concentrate on writing policies in central Louisiana north of Interstate 10, although it won’t rule out policies in other parts of the state. It is still enrolling to do business in the state and expects to write $3 million in premiums at the outset.

William Hampton, president of Colonial Lloyd’s, wanted to diversify outside the Texas market and found the reforms in Louisiana, which make it easier for insurance companies to seek rate increases, attractive.

“With homeowners coverage you need to diversify and spread it out,” he said. “You don’t want all the rooftops in the same community.”

Sunshine State Insurance, a Florida insurer that is beginning to write policies in Louisiana, will also focus on property north of Interstate 10. “We are a niche player,” said CEO John Rogan.

The company will probably write $5 million to $10 million in homeowner’s insurance.

Fidelity National Insurance Co., on the other hand, is willing to look south of I-10. It will even insure structures on waterways as long as they meet guidelines for the age of the roof and proximity to a fire hydrant, said Kathy Mailhef, customer service representative at the Metairie insurance firm J. Everett Eaves.

Some carriers are willing to write policies south of I-10 if the customer agrees to open other lines of insurance – such as auto insurance – with them.

Encompass, a division of Allstate, will write coverage in certain ZIP codes south of I-10, Mailhef said.

And State Farm Insurance, which quit writing new policies south of I-10 a year ago, resumed this year, said company spokesman Morris Anderson. But “the I-10 corridor has challenges,” said Anderson, who acknowledged that his firm is not writing as aggressively in New Orleans.

“South of I-10 has loosened up,” said Jeff Albright, executive director of the Independent Insurance Agents of Louisiana in Baton Rouge. But “I won’t say there is plenty of capacity, because we need additional insurance companies to come in and open up below I-10.”

State Insurance Commissioner Robert Wooley said he plans to address the insurance problem in coastal Louisiana by creating programs to improve and better storm-proof the housing stock and to reduce coastal erosion, both of which should lure companies to write new policies.

“If we can make it through this year without a serious hurricane, we can set up the first storm fund,” Wooley said.

The fund would be created from part of the premiums paid by policyholders in the Citizens Property Insurance plan, a state plan that provides insurance where private insurers won’t. The storm fund would award grants to policyholders to install shutters and roof tie-downs, all of which help properties withstand high winds.

Meanwhile, the number of high-risk policies written through the Citizens plan is declining. Terry Lisotta, secretary of the plan, said Citizens now has 135,000 policies, about 9 percent of the homeowners market in Louisiana.

Applications for this program of last resort have fallen 37 percent during the first five months of 2005 compared with the same period last year, to 2,980 per month. The decline is a sign that more insurance companies are moving into the state and offering less expensive choices, Lisotta said.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Topics Carriers Louisiana Homeowners