A growing burden
Rising homeowners insurance premiums are taking a toll on Louisiana’s coastal communities
The Louisiana Property Insurance Clarity Act, passed in 2014, requires greater transparency in premiums paid by Louisiana residents and payouts by insurance companies operating in the state. This report examines the social and economic costs of rising home insurance premiums on Louisiana communities, with a particular focus on coastal communities hard hit by recent natural and manmade disasters.
In recent years, the financial toll on individual homeowners from natural and manmade disasters has been compounded by rising expenses and housing costs. In the private market of homeowners insurance, rates have risen over 200 percent in some coastal parishes since Hurricanes Katrina and Rita in 2005. Insurance premiums, as a percentage of household income, are considerably higher in coastal parishes.
Low-income homeowners near the coast are especially burdened. They face higher homeowners insurance premiums (and flood insurance premiums), and higher housing costs, but must pay for these expenses with low (and often fixed) incomes. These households not only lack the capital necessary for major mitigation and home hardening projects, but also face barriers to securing low-interest financing options.