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On 2une In, Louisiana insurance head says incentive program appears to be success

3 months 2 weeks 1 day ago Thursday, June 08 2023 Jun 8, 2023 June 08, 2023 1:59 PM June 08, 2023 in News
Source: WBRZ
By: News

A Louisiana insurance fund that was set up to entice companies to write new policies in the state appears to be working.

State Insurance Commissioner Jim Donelon visited WBRZ's 2uneIn show Thursday and said it's possible the $45 million incentive program will lead to about 50,000 new policies being written in the state. 

The Insure Louisiana Incentive Program came about in response to multiple companies backing out of the state property insurance market in 2022. Several strong to severe hurricanes hit Louisiana in 2020 and 2021, including Laura and Delta and Zeta in 2020 and Ida in 2021.

When the insurance companies pulled out, many property owners turned to the state-run Louisiana Citizens Property Insurance Corp., but some owners just dropped coverage. The state saw similar problems after two major storms in 2005.

The number of policies written by Citizens jumped from 41,000 in 2021 to more than 120,000 last year.

"We've gotten response from eight companies. They have received their money as of now and next week, we ll get the first report on the new business they have written since that money was distributed," Donelon said. "We expect it will result in 50,000 policies being taken out of Citizens, our market of last resort. Relief is on the way, just as happened after Katrina and Rita."

Donelon is hopeful that the incentives will not only reduce pressure on Citizens, but will also drive down costs in the private insurance market.

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