Donelon responds to complaints about the availability of insurance coverage after insurers received incentives

NEW ORLEANS (WVUE) - Insurance agents and some homeowners say it’s still tough to find insurance coverage even though the state doled out millions in financial incentives to insurers to write new wind and hail coverage.

Dan Burghardt owns Dan Burghardt Insurance.

“We keep hearing that they will write soon but our hopes are down at this point. I’m assuming the hurricane season June 1st it may be a while,” said Burghardt.

FOX 8 has heard complaints from homeowners who say they were told by insurers or their brokers that insurance companies are not writing new coverage until after this hurricane season.

Burghardt was asked if he or any of his staffers encountered such.

“Yes, we are also getting feedback that opening up, it might be waiting until maybe October, some companies said July but we’re getting mixed messages,” said Burghardt.

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Stephen Lovecchio is a TWFG Insurance branch owner.

“It’s definitely true,” said Lovecchio. “For the most part, all these carriers buy their hurricane insurance effective June 1, so there are a few out there who still have not finished buying their hurricane protection themselves.”

And that is making it harder for homeowners in Jefferson, Orleans and St. Tammany Parishes to find coverage in the private market.

“Those are the ones where the companies are not yet writing wholeheartedly. I think in a lot of the other parishes these companies are writing but it’s the three that we’re in right now, which are the three most expensive to insurers as far as reinsurance goes and I know those carriers haven’t finished their buys, yet,” said Lovecchio.

Burghardt said, “I think it’s more of an underwriting suicide to enter into the marketplace, writing heftily in areas where hurricane-prone damages are more to happen than anywhere else.

But Insurance Commissioner Jim Donelon told FOX 8 he does not think insurers are holding off on writing policies until next year. He said he has had recent conversations with them.

“I have no reason to believe that they’re doing that. It was if you will a rumor brought to our attention as well by an agent which triggered my first Zoom call with all eight companies and disposed to my satisfaction of that rumor,” said Donelon.

However, he says some insurers may have reached the limit of policies they can write in parts of the New Orleans area.

“In fact, this week I signed a waiver that I have the authority to do that by the terms of the incentive program limits any company from writing more than 15% of their total coverage in any one parish and I have told those eight companies if anyone gets to 15% ask for a waiver and I will grant it for St. Tammany, Orleans and Jefferson,” Donelon said.

Lovecchio agrees insurers have limits.

“Each one of these carriers, they only want to have so many policies in any given parish or county and they’re limited by their reinsurers.”

And even though some homeowners may not like the insurance rates they paying through Louisiana Citizens, the state’s insurer of last resort Burghardt urges homeowners not to drop their coverage.

“Citizens although it’s the market of last resort , it’s the market of only resort at this point and if all else fails Citizens is always there to help,” he said.

Donelon expects coverage to become more available soon.

“Help is on the way. I will say within two weeks there will be coverage available to folks even in those three parishes.”

But significantly lower rates could be a ways off.

“It is going to be really, really tough to get rates because just don’t have a lot more companies,” said Lovecchio.

In terms of the availability of coverage, he expects things to improve before year’s end.

And with hurricane season beginning on June 1, Burghardt says property need to take a few steps beforehand.

“You always need to record everything in your property, all your contents, good idea to make a video tape. Everybody has a video recorder on their phones, document everything just in case,” he said.

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