April 20, 2024
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By BY ANTHONY MCAULEY

Just before noon, on August 29, 2021, two years after the landfall of Hurricane Ida, its lingering effects are still felt in the 25 parishes along the storm’s path.

Ida was one of the most expensive storms in Louisiana history. Its economic impact is estimated at $75 billion. Ida was the costliest storm in Louisiana’s history. According to the National Oceanic and Atmospheric Administration, the total economic impact of Ida is estimated at $75 Billion.

In Terrebonne Parish and Lafourche Parish, a combined population of 200,000 people, or 77,000 households suffered an insured damage of nearly $3 billion. This is a large portion of the 14 billion dollars that Ida caused insurers in the entire state.

Chris Pulaski is the head of planning for Terrebonne parish.

If Ida costs are added up to the $10 billion that Laura, Delta, and Zeta cost insurers, then the hurricane losses in 2020 and 2021 will be almost as high as Katrina’s $25 billion.

In the wake of Ida’s claims, eleven insurance companies filed for bankruptcy. According to Insurance Information Institute (III), a non-profit industry watchdog, at least fifty insurance companies stopped taking on new business for hurricane-prone areas.

premiums for home- and business insurance increased as a result. Louisiana Citizens Property Insurance Corp. has increased its policyholders from 35,000 to 128,000 in the last two years.

Michel Leonard, chief economist at the Insurance Information Institute, stated that while Florida’s recent insurance market volatility was largely due to fraudulent practices, Louisiana had a lot to do with insurers not being adequately capitalized and having insufficient reinsurance.

Louisiana Insurance Commissioner Jim Donelon, in an attempt to stabilize the market and lower premiums earlier this year , secured $45,000,000 for incentives that insurance companies could offer to return to Louisiana. The progress has been very slow.

Leonard said that Donelon had acknowledged the grants approved were only a first step in lowering homeowners insurance rates. He added that structural changes would be required. One of them is to let insurers determine premiums based on what they anticipate in an era of climate change, and not just past events.

Leonard stated that “to the best of his knowledge, he has not heard about any state which is moving from a backwards-looking to a forward-looking approach in setting rates.”

Insurance turmoil is causing delays and uncertainty for those who are trying to repair their houses and businesses.

Pulaski said, Terrebonne’s chief planner, that his struggle with insurance to repair his home in Houma, despite the fact that thousands of other residents had suffered worse damages, reflects the issues common to many.

Two trees fell on the house during Hurricane Ida, requiring a $115,000 roof replacement. After six months, Southern Fidelity agreed to cover the cost. Southern Fidelity went bankrupt before any contractors were lined up.

Now I’m a Citizen. “But that was a brand new policy, and they wouldn’t pay on a claim that I made years ago, so, then, I went to LIGA”, Pulaski explained, referring the Louisiana Insurance Guaranty Association (LIGA), the state bailout funds that are financed through a tax on the insurance industry.

It was difficult to maintain the bailout fund , which usually has only a dozen staff members. The bailout fund, which normally has a staff of just a dozen employees, was overwhelmed by the insurance crisis and struggled to keep up.

There were also property owners who had insufficient or no insurance. Now, they rely heavily on the government to assist them in their recovery.

Louisiana received more than $3.1 Billion of federal Community Development Block Grant Disaster Recovery Funds to cover the 2020 and 2021 storms.

This money has been divided between 14 different programs, which target small business owners, homeowners and local government. It is notoriously difficult and time-consuming to claim money, especially when only a small fraction has actually been spent.

Pat Forbes, Executive Director of Louisiana’s Office of Community Development said that about 4,000 grant applications totaling $300 million have been approved under Restore Louisiana, the state’s main program for home construction. This is less than half of the $680m in the fund.

Grants totaling $900,000,000 are available for affordable housing programs, but none has yet been used.

Forbes stated that “we try to not make it slow,” but that there can be a long process before the grant money is translated into affordable housing in areas where housing needs are most urgent.

It has to be a competitive process. Forbes stated that the government must also perform environmental assessments. Then developers must pay for architects and engineers who will design and build the items. It can take up to two years or more.

The process of obtaining economic development grant money for the parishes to use for things like repairing damaged schools or replacing lost community centers is also lengthy.

Kristi Lumpkin is Lafourche’s director of Economic Development. She said that the parish was allocated just $9 million through the Hometown Revitalization Program to be spent in areas with low and moderate incomes to restore public amenities. Lafourche, according to Lumpkin, is waiting for a state cooperative venture agreement before they can move forward. There are also “very strict guidelines” from the U.S. Department of Housing and Urban Development about which projects can receive money.

Lafourche said she expects to see the money in May 2025.

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