The four major candidates for Louisiana governor have a range of different ideas for eliminating a persistent obstacle to south Louisiana’s hurricane recovery: high homeowners insurance rates.
Walter Boasso and Bobby Jindal want to force more insurers to offer homeowners policies covering wind damage. Foster Campbell wants to team up with other coastal states and negotiate, as one, with insurance companies for lower rates.
John Georges said he would consider offering insurers $100 million in incentives – on top of the $100 million in taxpayer money that’s already being offered to companies that agree to write policies along Louisiana’s coast.
“I want to provide the carrot approach, as opposed to the stick,” said Georges, an independent from New Orleans.
The four men agree that easing insurance rates is key to speeding the storm recovery in south Louisiana, where some homeowners are paying double for insurance what they were before hurricanes Katrina and Rita.
Gov. Kathleen Blanco and Insurance Commissioner Jim Donelon backed the dissolution of the politically appointed Louisiana Insurance Rating Commission, which insurance companies said for years was a hindrance. Blanco also supported Donelon’s plan to offer $100 million to insurers who agree to write some of the policies now written by Louisiana’s taxpayer-backed Citizens Property Insurance Corp.
Of the candidates who want to replace Blanco, none want to do away with those policies.
But all four have different proposals they say will keep the cost of insurance stable, attract more insurers to the state and protect consumers from insurance companies that act in bad faith.
Jindal said he would force insurers that now write fire and theft policies to also offer coverage for wind and hail damage – the policies most in demand along the hurricane-vulnerable coast. Jindal said the current system essentially allows the companies to write half a policy – the fire and theft portion – while leaving the homeowner to look elsewhere for wind coverage.
“I think it’s reasonable to tell insurance companies, ‘If you want to be here, you should be willing to offer the entire policy.’ The state certainly has that regulatory authority,” said Jindal, a Republican congressman from Kenner.
“We’re trying to make this a business friendly environment, but we do have a shortage of available insurance coverage.”
Boasso takes that idea farther, saying he would force companies that write auto insurance policies to also offer homeowners policies that include wind coverage.
“We can’t cherry pick whether we want to buy insurance, so insurance companies shouldn’t be able to cherry pick what they offer,” said Boasso, a Democratic state senator from St. Bernard Parish.
Campbell said he would talk with governors of other Gulf and Atlantic states and pool their insurance markets into one, multistate market. That coalition of states would then represent a massive insurance market whose governments could negotiate with insurance companies from a position of greater strength, demanding more reasonable rates for homeowners along the coast and farther inland.
“Then you could tell them, ‘If you want to do business in our states, we’re not going to be robbed. You’re going to have to do something for our coastal people,”‘ said Campbell, a Democratic member of the Public Service Commission from Bossier Parish.
Georges takes a pro-industry approach, even taking issue with Blanco’s veto this year of a bill that would have meant cost increases for auto insurance around the state.
“I’ll do anything that’s going to bring more insurers to the state,” he said.
Georges said he would appoint a hurricane “recovery czar,” part of whose job would be to meet with insurers and pitch Louisiana as a good place to do business. As governor, Georges said he would network with the insurers – in meetings alongside the insurance commissioner and his recovery czar – and persuade those executives to write policies along the coast.
“The whole idea is to network with insurance executives, to create a sense of confidence in Louisiana, that we have a plan,” Georges said. “They have to have confidence in the political leadership. The type of leader I am, I will bring that level of confidence.”
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