John Guidroz

Southwest Louisiana residents are still weary from the one-two punch of Hurricanes Laura and Delta last year. Still, the Atlantic hurricane season is in full swing, and Louisiana Insurance Commissioner Jim Donelon said residents should prepare themselves by getting flood insurance and understanding what their insurance policy covers. 

Donelon told the American Press editorial board Wednesday that only 23 percent of Louisiana residents have flood insurance, compared to 17 percent in Calcasieu Parish, 30 percent in Cameron Parish and 2 percent in Allen Parish. Homeowners insurance policies don‘t cover flood damage.

Homeowners should also get with their insurance agent so they can know what their named storm deductible is and be prepared to meet it, Donelon said. 

“The sooner you get in the queue to get an adjuster out, the sooner you’ll get your payment and the sooner you’ll get money to get contractors who are local, reputable folks,” he said.

Residents who are unhappy with the results from their post-hurricane insurance claims should file a complaint with the Insurance Commissioner’s office. So far, 1,610 complaints have been filed for Hurricanes Laura, Delta and Zeta, with the bulk being tied to Laura, Donelon said. More than 1,450 complaints have been closed, with Donelon’s office still receiving three to four complaints daily. Lack of communication was the bigger issue in the initial complaints, but the amount owed is also mentioned.

The National Association of Insurance Commissioners performs data calls on commercial and residential properties to report the number of claims filed and closed after a disaster. Of Laura, Delta and Zeta, there were 311,000 claims filed through the first quarter, more than half being from Laura. Donelon said 82 percent are closed by the companies and 62 percent are closed with payment.

“I tell everybody, whatever you can afford to self insure for, do,” he said.

Donelon said he was impressed with the post-hurricane condition of Lake Charles’ downtown district. Once he got away from the area, however, many neighborhoods showed plenty of recovery work left.

“It is obvious,” Donelon said.

Under Louisiana law, residents who have had their homeowners insurance company for three years are “married” for as long as that company remains in business in the state. It applies to all insurers, Donelon said.

“They can’t nonrenew you, they can’t change your deductible, they can’t do anything premium-wise to you that they don’t do to their statewide local business,” he said. “It’s incredibly valuable, and it proved itself after (Hurricane) Katrina.”

The law includes the surplus lines market, which Donelon described as “the cowboys of the insurance industry.” These companies, he said, go into markets in the aftermath of natural disasters — a time when admitted insurance carriers are pulling back and downsizing — in an attempt to make extra money by charging unregulated rates and coverages.

Surplus companies nationwide are not regulated in the same way admitted companies are for rates and coverages, Donelon said.

“It’s a huge piece of our state’s insurance market because we have so much high-risk activity in our state — oil and gas, offshore, ports, refineries,” he said. “All of those things the surplus market serves.”

Donelon’s office issued a cease and desist order for GeoVera Insurance, a surplus line carrier, telling them to stop non-renewing 3-year-old policies and to reinstate the ones they reportedly nonrenewed through a misinterpretation of the state’s consumer protection law.

Donelon said he worked to get the Legislature to set aside $600,000 to pay for the firm Risk and Regulatory Consulting LLC to do market exams of the five insurance companies determined to be the “worst actors,” based upon a complaint index created by the Louisiana Insurance Department. The money will eventually be reimbursed, costing the state nothing.

The world’s biggest insurance loss event remains the $23.3 billion paid out after Hurricane Katrina’s 2005 landfall for claims in Louisiana alone, Donelon said. He said $8.3 billion was paid out after Hurricane Laura.

“We are always at extreme risk,” he said of the tropical threat along the Gulf of Mexico.

Louisiana Insurance Commission Jim Donelon visits with the American Press editorial board Wednesday morning.

John Guidroz