While crime took center stage throughout the 2023 campaign cycle, the availability and rising cost of homeowners insurance was a close second. After a record 2020-2021 hurricane season, many insurance providers did not return to Louisiana.  

Over a dozen writers withdrew from the state or declared insolvency, creating a vacuum that the insurer of last resort, Louisiana Citizens Property Insurance Corp, was forced to fill. Its enrollment has nearly tripled over the last two years.As a result,Louisiana is the third most expensive state for homeowners insurance rates.  

Many, including Louisiana’s newly elected Commissioner of Insurance, Tim Temple, place as much blame on the state’s unwelcoming regulatory climate as they do its natural climate.

While disaster is unavoidable, a weak insurance market is not. The Commissioner Elect has vowed to revive the market for homeowners insurance through reforms to regulation, legislation, and litigation. Shortly after his election, Temple called for swift legislative action, citing Florida’s similar insurance plight and rapid legislative response as a model. Additionally, Governor-Elect Jeff Landry created a council on Insurance, led by Temple, as part of his transition team.  

What can Louisiana homeowners expect and could lower insurance rates be on the way? The outcome is largely dependent upon whether Louisiana’s new state leaders can reverse the state’s bad habits of government overregulation that increase costs or drive businesses out of the state entirely.  

Temple suggests amending or eliminating the state’s “Three Year Rule,” which tells insurance providers how to manage their relationships with clients and deregulating and modernizing the state’s rate filing process. Insurers in Louisiana are subject to a set of regulations that prohibit them from changing their rates more than once a year and require departmental approval before they change any of their policies. To make matters worse, the system functions with significant delays and the approval process is often unnecessarily drawn out. 

Temple and other groups are also urging lawmakers to reform the state’s “bad faith” law, which creates a framework that encourages homeowners to sue their insurance companies for far more than their claim was worth. Instead, Temple has expressed favor for bad faith laws that allow the insurance companies to challenge lawsuits. Additionally, others have expressed an interest in reconsidering the state’s premium tax, which gets passed on to consumers.  

These and other reforms could make the legal and regulatory environment more welcoming to out-of-state insurers because it would position Louisiana in greater alignment with other states, reduce costs, and lessen their own risk of being sued.  

It is unclear whether the governor or lawmakers will call a special session to address these issues, but change seems imminent. While the governor-elect’s transition committees and newly elected lawmakers sort through a number of options and opportunities for positive change, Temple is encouraging Louisiana residents to visit his website and submit comments and suggestions for reform. Governor-Elect Landry’s team has also invited citizens to share their ideas and concerns on this and other policy priorities.  

Though hurricane season begins in June, lawmakers ought to begin their preparations now by creating a more competitive and sustainable homeowners insurance market that will effectively serve the people of Louisiana for years to come.