Homeowners Insurance Crisis: Woman says she’ll need a second job to afford an increase

“I was coming from the doctor and I had a breakdown and I sat in the car and I just cried,” said Darlinda Cook after she found out about the increase.

A week from Monday, the Louisiana Legislature will convene a special session to deal with the homeowners’ insurance crisis. Louisiana Insurance Commissioner Jim Donelon asked the governor for the special session, after tens of thousands of people lost their insurance companies after all the damage from recent hurricanes.

See if this story sounds familiar to you. One woman’s insurance is going up so much, that her house note this year would go from $800 a month to $1,400. Add to that, she has health problems to deal with. And her insurance company went under, so she had to pay out-of-pocket for some of her Hurricane Ida repairs.

“I was like what? I was coming from the doctor and I had a breakdown and I sat in the car and I just cried,” said Darlinda Cook, 56.

In her mid-50s, Darlinda finally realized the American dream. Just 3 years ago, she got her first home. Now she is one of thousands facing the state’s homeowners’ insurance crisis.

“When you dream about something, and you finally get it, you do everything you have to, to try to keep it. So, if I have to get a second job, I have to do it, but I didn’t plan on being almost 60 working two jobs. Who does that?” Cook said.

“If the winds come from the southeast, they’re open, because not a lot of things can stop the wind from coming straight from the Gulf of Mexico,” explained Stephen Lovecchio, owner of Lovecchio Insurance Agency.

Her insurance agent Lovecchio, says Darlinda is especially hard hit because she is in New Orleans East. Homes there, and in other places close to the lake, have higher rate increases. He hopes the legislative special session results in monetary incentives to get some of the smaller, regional insurance companies back in the state to help bring premiums down.

“Then the state incentive would say, ‘If you do come in, we’re going to give you some extra dollars to buy reinsurance with.’ That’s what has all these carriers scared, is they don’t know what the reinsurance cost is going to be. They’ve only been told that it’s going to be very expensive,” he said.

Reinsurance is insurance for insurance companies. It helps homeowners’ insurance companies handle big events like Hurricane Ida, for example.

He says, the three states insurance writers don’t want to go to is California, because they aren’t allowing rate increases, Louisiana and Florida, but Florida has already had two special sessions.

“They’ve done tort reform, and they actually have a catastrophe fund. Now that Florida has cleaned up a lot of stuff. That just leaves us,” said Lovecchio.

“And if we can just get our leaders to understand that, you know, I don’t know. They don’t get it,” said Cook.

The Reinsurance Association of America says that “crises in property insurance markets today frequently have little to do with Mother Nature. Instead, man-made crises in the form of legal system abuse, claims fraud, and regulatory interference are the root causes of most market instability.”

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