NEW ORLEANS (WVUE) – Three years ago, Hurricane Ida roared ashore and devastated southeast Louisiana, leaving many homeowners struggling with the impact on their insurance.
Jim Donelon, who became Louisiana’s insurance commissioner in 2006, was the state’s top insurance regulator when Ida struck on August 29, 2021, the same day Katrina made landfall in 2005.
On the eve of Ida’s third anniversary, Donelon reflected on what was going through his mind when he realized that another powerful storm was about to make landfall in Louisiana, likely causing significant property damage.
“Very strong indeed. It was 150 mph winds at landfall, almost the same as the year before, the day before, and the year before Laura, when it was 150 mph,” Donelon said. “It’s scary, and the best news of all is that unlike the 1,500 of our fellow citizens who lost their lives in Katrina, very few lost their lives in Rita, Laura, Ida and the others.”
Nevertheless, Ida left behind catastrophic damage.
“I don’t have a breakdown that separates Laura and Ida, but in that 12-month and one-day period, there were 800,000 claims with total losses of $14 billion for Ida and $9 billion for Laura. Added together, that’s over $23 billion in change,” Donelon said.
Three years later, the insurance market in Louisiana is still challenging. Donelon was asked if he had had any sleepless nights because of the insurance crisis.
“Absolutely. I was 79 years old and I was thinking about retirement. Because of the ongoing crisis, I was torn. But I was 79 years old and I said to myself, from my personal point of view, if I ever want to retire and not die at my desk, it’s time for me to retire. And besides, it’s going to take longer than a quick year or two, or probably even four, to catch up,” he said.
But before deciding against seeking re-election in the fall of 2023, Donelon fought for financial incentives to attract more insurers to the state. He also got lawmakers to fund grants through La.’s Fortify Homes program to help residents reinforce their roofs against hurricane winds.
“I said in my last year in office that the quick fix is to get businesses to come back, like we did after Katrina and Rita. In the long term, we’re copying Alabama, and that’s reinforced,” Donelon said.
Donelon has long been a supporter of Louisiana’s decades-old rule that prohibited insurers from canceling policies. This year, however, lawmakers repealed the law, and insurers are now allowed to begin canceling a percentage of their existing policies in the state for three years. This year, however, lawmakers repealed the law, and insurers are now allowed to begin canceling a percentage of their existing policies in the state.
“They will certainly take it slower because, for one thing, the bill requires that no more than 5% of contracts that previously had this three-year protection will not be renewed each year,” Donelon said.
He continued: “And secondly, where one company doesn’t dare go, another company sees an opportunity. And that’s the nature of business. And that’s what motivates Commissioner (Tim) Temple to support this effort,” Donelon said when asked about the matter.
He says the cost of reinsurance will remain a factor, but believes the insurance landscape will improve. He urges citizens frustrated by higher premiums and fewer choices of insurance not paid for by insurers.
He urges citizens who are frustrated by higher premiums and fewer insurance choices not to give up.
“Companies are slowly coming back into the market and the recovery will happen,” Donelon said. “I’m really still optimistic that we’re going to get through this, recover and come out stronger,” Donelon said.
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