Three years after Hurricane Ida made landfall in southern Louisiana, many homeowners are still struggling to afford the cost to insure their homes. 

Since Ida, rates for customers of Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort, have increased by 164% on average, according to data analyzed by The Times-Picayune.

A dozen insurance companies went belly-up after the 2020 and 2021 hurricane seasons. Even more companies have announced they will no longer do business in Louisiana. 

In 2022, at least 12% of homeowners across the state had no insurance, according to the Consumer Federation of America. Since then, tens of thousands of homeowners have been added to Citizens’ rolls. The average cost of a policy has risen by $2,800.

This increase is out of reach for many homeowners in southern Louisiana. State and local politicians have begun to take notice. A law passed earlier this year gave relief for homeowners in the coastal part of the state, by halting the mandatory 10% premium surcharge for Citizens’ policyholders who are up for renewal over the next three years. Still, the expected relief will be modest and won’t go into effect until January.

This spring, Gov. Jeff Landry, at the urging of Louisiana Insurance Commissioner Tim Temple, signed four bills to create what he called a “free market” for insurance companies in the state. Temple believes that fewer industry regulations will lure homeowner insurance companies back to Louisiana and that the increased competition will reduce rates. 

The steep premium increases for homeowners began after Hurricane Katrina 19 years ago. 

So it was tragically fitting that, on Thursday, 19 years after the catastrophic hurricane, Devin Davis, a candidate for Louisiana’s second congressional district, stood at the New Orleans Katrina Memorial and announced a plan to combat the insurance crisis.

Meanwhile, the incumbent in that office, Rep. Troy Carter – who had participated in the annual, official Katrina-anniversary ceremony at the memorial just before Davis’ announcement – said that he, too, is focused on larger home-insurance solutions, though he doesn’t see the federal government as the correct route.

Davis, who was born and raised in New Orleans in a family with roots in the River Parishes, has seen first-hand that skyrocketing insurance rates make homeownership unaffordable, raise rent prices, force affordable housing providers to sell off units, and push the grown children of coastal families to leave their now-unaffordable native areas.

Though Louisiana is among the states hardest hit by disaster-fueled rate hikes, the insurance crisis cannot be solved at the state level, Davis said. Instead, he called for a federal insurance program that would lower premiums and regulate insurance companies in the short term, and ensure federal public insurance in the future. 

Over the last five years, Louisiana has faced an average of five separate billion-dollar weather and climate disasters each year, according to data from the National Centers for Environmental Information. State regulators have blamed the homeowner-insurance crisis on the series of bad storms and the difficulty of the reinsurance market. 

Costly disasters can devastate insurance companies, which also need insurance. In the secondary market, called “reinsurance,” insurance companies transfer a portion of their risk to reinsurers to write larger policies and offer coverage for high-risk areas. On the Gulf Coast, reinsurance typically comes into play after a major hurricane or other natural disaster. Many regional insurance companies went insolvent after Hurricane Ida because they could not pay the reinsurance costs. 

While some issues driving the homeowner insurance crisis can be regulated at the state and federal level, the reinsurance market operates on a global scale, said Haley Gentry, senior research fellow at the Tulane Institute on Water Resources Law & Policy. 

Some countries have taken a different approach to reinsurance, Gentry said. China and India, for example, have state-owned reinsurance corporations.

Davis’ suggested solution flows through the federal government.

As heavy rain began Thursday morning – a reminder that the state is in the peak of hurricane season – Davis announced three solutions to the insurance crisis that he would advocate for if elected to Congress. As outlined in Rep. Adam Schiff’s INSURE Act, establishing a Federal Catastrophe Reinsurance Program would cap insurers’ liability in the case of a catastrophic event. 

The catastrophe reinsurance program would provide insurance companies with the incentive to return to Louisiana and write policies in risk-prone areas like New Orleans. It would also give the federal government leverage to regulate insurance companies.

Reinsurance alone will not solve the homeowners’ crisis along the Gulf Coast. Climate change and extreme weather are increasing maintenance expenses for homeowners. The National Institute of Building Sciences estimates that every dollar invested in risk mitigation will save up to $13. But most low and middle-income homeowners cannot afford this upfront investment.

To invest in the future, Davis said, the federal government must invest in risk reduction and home hardening. Of course, he’d like to advocate for those changes from his own Congressional office. But regardless, he promised that he will work to push Congress to fund programs to cover these costs for low and middle-income families and affordable housing units.

And because increasing climate and extreme weather disasters have made home insurance increasingly unprofitable in Louisiana and other Gulf Coast states, Congress should also fund research into a federal public insurance program that could insure property owners in the case of a natural disaster, Davis said. This proposed solution includes repealing the McCarran–Ferguson Act, which largely exempts the insurance industry from federal regulation, including antitrust laws, and leaves regulation mostly up to the states.  

Last year, the Mississippi River Cities and Towns Initiative announced a new insurance pilot program with Munich Reinsurance Company to protect policyholders in the case of natural disasters that meet a certain threshold—such as a 100-year storm. Details about the program are not yet available. 

It wouldn’t be the first time the federal government stepped in to help Louisianans and residents of other flood-prone areas stay in their homes. After the Great Mississippi River Flood of 1927, private insurers were largely uninterested in taking on flood risks. Four decades later, in the devastating aftermath of Hurricane Betsy in 1965, President Lyndon Johnson flew to the area and began laying the groundwork for the 1968 creation of the National Flood Insurance Program and the Federal Insurance Administration, which helps to spread out the risk of flood damage. 

Still, Rep. Troy Carter, the current representative for Louisiana’s second congressional district, said that Davis should not be offering false hope to the electorate on homeowners’ insurance.

“The federal government has no role in property and casualty,” said Carter. “Property and casualty insurance is regulated by the state legislature, not the U.S. Congress.”

For nearly 20 years, Congress has been putting in hard work for those hit by hurricanes and floods, Carter contends. “This is an important day, as we commemorate Katrina,” said Carter. “We’ve put in a lot of money to make sure that Katrina won’t hurt us the way it did 19 years ago: shoring up our levees, providing coastal restoration, making sure that our communities are safer and more resilient. That’s receipts.”

Carter himself has pushed to improve the Federal Emergency Management Agency’s National Flood Insurance Program, he said. By contrast, the Heritage Foundation’s Project 2025, designed as a blueprint for Trump’s first few months in office if re-elected, would abandon FEMA’s program and leave Gulf Coast states entirely reliant on the private insurance market. 

Yet even now during the Biden administration, homeowners face perils within FEMA’s flood-hazard framework. Carter was extremely critical of the Risk Rating 2.0 program,  FEMA’s new methodology for calculating flood hazards, which has significantly increased insurance premiums for many homeowners in high-risk flood zones.  “Risk Rating 2.0 has been a game changer in the worst possible way. It has put homeowners at risk of losing homes that they have paid for,” Carter said. 

In New Orleans, more than 120 low-income families who own homes built by Habitat for Humanity faced the imminent threat of foreclosure because of increased insurance costs. Earlier this month, the New Orleans City Council routed $2 million in federal pandemic funds to the nonprofit to help stave off the foreclosures. 

But the city money is a temporary fix, a band-aid that doesn’t help other homeowners who can’t afford sky-high insurance premiums. 

Carter, who helped to co-chair the first Congressional Disaster Equity and Building Resilience Caucus, to discuss federal policies that impact underserved communities in disasters, said that he is focused on creating a more permanent solution to the problem.

“I am proud to say that our delegation in Congress, Republican and Democrat, and our brothers and sisters in Alabama and Mississippi are all in lockstep in pushing back against Risk Rating 2.0,” said Carter. “I’m hopeful that we’re going to have a resolution.”

This story has been updated to reflect that Temple believes that fewer regulations will reduce home-insurance rates — but those reductions were not promised.