Hurricane Laura made landfall in Southwest Louisiana nearly a year ago but local officials and state insurance regulators say the area still has a long way to go to recover.
Laura, which made landfall on August 27, 2020, displaced 2005’s Hurricane Rita as the second most costly storm in Louisiana history, the Louisiana Department of Insurance said.
Most of the 175,160 total insurance claims resulting from Hurricane Laura were residential property claims, according to the LDI. Total paid losses plus reserves on reported claims for Hurricane Laura as of the end of June were $8.6 billion, accounting for the vast majority of the estimated $10 billion in insured damage from the historic 2020 hurricane season in Louisiana.
Laura was one of three hurricanes, along with two tropical storms, that hit the state in 2020, making last year’s storm season the most active ever in Louisiana. According to the LDI, insurance companies reported $10 billion for claims in Louisiana from Hurricanes Laura, Delta and Zeta through June 30.
Insurance Commissioner Jim Donelon reminds policyholders affected by the hurricanes that their struggle has not been forgotten.
“For those Louisiana citizens who were affected by Hurricane Laura and are having issues with their insurer, the Department of Insurance can still help you. And for those of us throughout the state that did not bear the burden of the 2020 hurricane season, now is the time to help our fellow Louisianians,” Donelon said in a media release. “Lake Charles Mayor Nic Hunter and all the representatives of the Lake Charles area have been sounding the alarm that Southwest Louisiana needs assistance to recover from hurricanes Laura and Delta.”
The Help Southwest Louisiana Now campaign was created and launched as a grassroots effort to advocate for federal supplemental disaster relief funding. According to a press release from the City of Lake Charles, “within the City of Lake Charles alone, housing damages are estimated at $235 million, less than 13% of residential buildings have pulled permits to begin reconstruction or rehabilitation, 60% of public housing is still offline, average rental costs have risen by 22%, and 21% of businesses have not renewed occupational licenses for 2021.”
During the 2021 legislative session, the insurance department worked with lawmakers, including former Lake Charles Sen. Ronnie Johns, who sponsored an amendment to the annual state budget bill to appropriate funds to perform market conduct examinations on five insurers that received a disproportionate share of complaints after the 2020 storms.
The results of market conduct examinations can trigger regulatory action in the form of fines or other punitive measures if the examinations reveal that improper activity has occurred. LDI is conducting thorough examinations of these insurers to protect policyholders affected by Hurricane Laura.
LDI has received over 1,700 complaints related to the 2020 hurricane season and has recovered more than $50.4 million on behalf of policyholders through mid-August.
Policyholders have filed 316,879 claims of all types from the three 2020 hurricanes as of the end of June 2021. Of those, 205,554 claims, or 65%, were closed with payment as of June 30, garnering $7.8 billion in payments for damage caused by the three hurricanes. Insurers have reserved an additional $2.2 billion to pay on those claims.
Payments from private insurers do not include claims or payments from the National Flood Insurance Program (NFIP). They also do not include uninsured losses and what people paid out of pocket to cover the deductibles on their insurance policies. As such, the true cost of the three storms is much higher, according to the LDI.
The 2020 storm season was the most active ever in Louisiana, with three hurricanes plus tropical storms Cristobal and Marco striking the state. The 2020 storm season was also the second most expensive for Louisiana behind the 2005 storm season. Hurricane Laura has displaced Hurricane Rita in 2005 as the second most costly storm in Louisiana history.
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