Navigating Louisiana's Insurance Crisis: A Comparative Analysis with Florida

Louisiana's Insurance Market Deterioration

Louisiana's property insurance market has been in decline since the state experienced a record level of hurricane activity during the 2020/2021 seasons, according to the Triple-I. Twelve insurers that write homeowners coverage in Louisiana were declared insolvent between July 2021 and February 2023.

Florida's Insurance Crisis Root Causes

While Florida is working to address its property/casualty insurance crisis, the underlying causes differ from Louisiana's. Florida's problems are largely rooted in decades of litigation abuse and fraud, whereas Louisiana's troubles have more to do with insurers being undercapitalized and not having enough reinsurance to withstand the claims incurred during the record-setting hurricane seasons of 2020 and 2021.

Legal System Abuse and State-Run Insurer Growth

Legal system abuse is also a factor in Louisiana's crisis, as highlighted by Insurance Commissioner Jim Donelon's cease-and-desist order against a Houston-based law firm. Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort, has grown from 35,000 to 128,000 policyholders over the past two years.