Thousands of Louisianans will lose homeowners insurance coverage this month

NEW ORLEANS (WVUE) - With the hurricane season underway, thousands of Louisiana policyholders face a storm of insurance cancellations in a matter of days. And many are not pleased, along with some insurance agents.

Sofia Dheming has no choice but to purchase new homeowners’ insurance.

“We have a couple of quotes, the highest I got was like $9,000, so that was like three times the amount we were paying originally. And then we came down to $4,700 and that’s a lot of deductions that we took out, stuff that we may need but we had to make it work,” said Dheming.

She had received a letter a day earlier informing her that her insurance would be canceled as of June, 22, 2022.

Some insurance agents have hundreds of customers who are impacted by the coming cancellations.

Ross Fayard, who owns Amstate Insurance, says his phone is inundated with people desperate for insurance.

“I turned my cellphone off from 8 to 5. I turned it on and I have 198 text messages three days in a row. People need homeowners’ insurance desperately,” said Fayard.

He says Insurance Commissioner Jim Donelon needs to act.

“This needs to be fixed and the only one that can fix it is Jim Donelon, he needs to fix it or he needs to resign. That’s cold-hard facts because I am dealing with people all day crying not knowing what to do. This can be fixed, this can be fixed,” said Fayard.

“Please help us out,” Dheming says.

FOX 8 asked for an interview with Donelon but his office could not accommodate by our deadline.

John Ford, Deputy Commissioner in the Louisiana Department of Insurance’s Public Affairs Division issued the following statement to FOX 8:

“Lighthouse Excalibur is a failed insurer that was placed into receivership in April of this year. The company had approximately 29,000 policyholders when it was placed into receivership. Policyholders were notified by the Receiver (the person operating the company while it is in receivership) that their policy with Lighthouse would be canceled effective June 22. Any policyholders who have not gotten a new insurance policy yet need to contact an insurance agent now for help finding a policy for their home before their coverage is canceled. For help finding an agent, please visit ldi.la.gov and click on the link to find an agent on our home page.”

And Ford confirmed that other policyholders with a different insurer, Maison, are losing their coverage at the end of this month.

“Maison was not able to obtain reinsurance for this year’s hurricane season, which means it’s unlikely they could fulfill their obligations to policyholders in the event of a hurricane. Because they were in danger of going insolvent without reinsurance, they were able to cancel the policies. It’s a different reason than Lighthouse, which was an insolvency, but similar for policyholders in that they will need to contact an agent and find a new policy by the cancellation date of June 30. It’s very important that folks know they need to contact an agent, because if the policyholder/agent is unable to find a policy in the private market, the agent can obtain a policy with Louisiana Citizens, which is our insurer of last resort,” he said in an email to FOX 8.

After Hurricane Ida in 2021, insurance premiums are increasing for many policyholders.

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“We have some carriers now that’s taking policies and the rate increase is 40%, 50%. I don’t care what anybody gets up here and say, oh it’s not going up that high. I know, my office is a huge insurance agency. We see renewals come in from $2,000 to $4,000 or $5,000 every day,” said Fayard.

Dheming is also a realtor and is seeing the impacts of the current insurance landscape on homebuying.

“Flood insurance is going up as they are, we have now homeowners’ insurance that’s going to go up and you know interest rates are going up,” she said.

Fayard says people who replaced their roof should be sure to let their insurance company know because that could result in a financial benefit.

“Take two photos of your roof, front and back, get a paid receipt, send it to your agent, ask your agent to make sure you’re getting the new roof discount, it’s anywhere from a thousand to a $2,000 credit. A lot of people don’t know that,” he said.

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