Allstate Insurance Co. has no immediate plan to drop wind coverage for homeowners in 18 coastal parishes, but the insurer wants to find new ways to offset potential losses if more hurricanes trigger big claims in south Louisiana, the state’s top regulator said.
Insurance Commissioner Jim Donelon met with Allstate President Thomas Wilson on July 31 in an attempt to ease the insurer’s concern that writing homeowners policies in Louisiana has become too risky and expensive because of the state’s vulnerability to storms.
The meeting came after Donelon held a July 21 news conference to announce that Allstate had threatened to leave Louisiana altogether if it could not win some relaxation in state laws that prevent the firm from dropping wind and hail coverage from 30,000 existing policyholders in coastal parishes.
Allstate issued a news release that provided no further details about its plans – but said the company will continue doing business in Louisiana.
“One option we are not evaluating is leaving the state,” Wilson said in the release.
Donelon said the company needs some type of legal change in the state to remain profitable.
One option, he said, is the creation of a quasi-governmental entity that would be created and funded to cover future damage to insured property caused by high winds. The entity could be funded out of the state’s general fund, he said.
Donelon and Wilson met for over two hours at the company’s Northbrook, Ill. headquarters.
Gov. Kathleen Blanco took part in the meeting via teleconference. She said afterward that she gained a new understanding of Allstate’s position: trying to remain profitable while writing policies that include wind coverage in a region that is highly prone to severe wind damage.
She said the conversation with Allstate officials gave her the sense that the company plans to continue writing policies in the state.
“I get the feeling that they are not planning to leave Louisiana, so in that sense it was positive,” she said.
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