Incoming Louisiana Insurance Commissioner: Deregulation Key to Ending Crisis
Incoming Louisiana Insurance Commissioner Tim Temple plans to end the state's homeowners insurance crisis with deregulation to bring in more carriers.
Louisiana’s home insurance crisis is only getting worse as more disasters like hurricanes, flooding, drought and more frequent storms are having a big impact. At last count, at least 20 insurance companies have left Louisiana in the last two years alone. According to one new analysis, Louisiana ranks the highest for expected natural disaster losses per capita of any state. The average cost of homeowners insurance in Louisiana is $2,675, far higher than the national average of $1,820. Incoming Louisiana Insurance Commissioner Tim Temple, has made it clear that he plans to call for a special legislative session after he takes office in January. During a report by our public radio sister station WWNO in New Orleans, Temple pointed to deregulation as one answer, preventing other companies from doing business in the state. Temple tells WWNO reporter Molly Ryan, that he plans to present a package of bills during the special session he wants to call. On his first day in office, Temple says he will remove the limit on how many times an insurance company can change their rates. Right now, it’s only once a year. Temple insists “You allow [the] free market to work. And that means companies change their rates when market conditions dictate, and they’re actuarially sound.”
But, Temple will need legislative approval to remove another consumer provision called the 3-year rule. It’s a Louisiana law that prevents insurance companies from dropping customers without a reason. Temple predicts fewer regulations will attract more insurance providers to Louisiana, and lead to lower rates. “I’ve heard from insurance companies that say that is their biggest barrier to wanting to come to Louisiana.” But retiring Louisiana Insurance Commissioner Jim Donelon has supported the 3-year rule, calling it a necessary piece of consumer protection. Louisiana drivers are also struggling with rising premiums, paying twice as much compared to other states. the second highest rates in the country. Donelon recently approved a 17 percent increase for State Farm Car Insurance customers in Louisiana. Donelon blames inflation, supply chain issues, and increased repair costs for the need to increase car insurance rates. The state-run insurance carrier, City Insurance, is the carrier of last resort for the homeowners who lost their coverage when their insurance company dropped them.