Louisiana Insurance Market Crisis: Rising Costs & Policy Concerns Explained

All right, good afternoon. Welcome to the Overruled podcast, brought to you by the Scott Vicknair Law Firm. I am here with my co-host, Caitlin Carrigan. This is David Vicknair. We’re having a beautiful day in New Orleans today, and we have a really meaty and interesting topic to discuss. We usually, you know, when we usually do these shows, Caitlin, we break them up, when we don’t have a guest on, we try to get a couple of different topics and, kind of bounce off, differentiating issues, so that Brad and I, and you and I have done a couple of shows so far and been able to do that. But when you brought me this topic, I knew it was a very hot topic. No pun intended because we’re all still sweating in New Orleans. A very hot topic that a lot of our listeners would be interested in listening to and discussing. And that is the current insurance climate, and the insurance market in both the state of Louisiana and the country at large. And I’m going to kind of let you just take us into a deep dive of, of your research and, and items that you wanted to discuss on this particular topic.

Well, first of all, I love that you used the words, insurance and research in one subject to introduce this. I’m sure it makes people really want to jump to listening. Traditionally, those are not subjects that anybody is interested in. Except when your homeowner’s policy is going up like 150% all of a sudden, you start to be pretty interested in what the hell’s going on.

That’s exactly the problem, David, and that’s why I chose this topic to kind of address for our listeners and viewers today, is because unfortunately, this is something that us here in Louisiana, and so many of our neighbors in other states, especially in Florida recently, are having to face because of the, the natural catastrophes that we’re encountering, almost on a regular and routine basis now. So one of the things that I think everybody has started to notice is that the insurance coverage in Louisiana is impacting homeowners, regardless of the value of the home. And one of these reasons is because of how many natural disasters, Louisianians are having to withstand and sustain year after year after year. And so looking into this and judging by the insurance market recently, this is one of the issues, one of the big changes that has happened recently, was that everybody’s premiums went up.

You know, I don’t know if in, if you’ve talked to some friends, David, or what not, or, anybody in our circles, but I know in my particular friendship circle, family circle, that this is a very common complaint. I know personally, ours went up as well. We have a residential home here in, here in New Orleans proper. It would.

I wouldn’t, I wouldn’t say, you know, I wouldn’t say it’s a complaint. It’s like most of the time, it’s like, hey Vicknair, what, what the hell is going on with insurance? And asking because they think. And I think we do have a unique perspective, right, as lawyers about what’s happening in the insurance market. But I, I, I have found that most friends, clients, and people that I talk to are like shell shocked, essentially, with the cost of their own.

Well, I am an attorney, and I was still shell shocked. So I can only imagine what others are going through. And one of the, one of the situations and consequences that we’re facing as Louisianians is that because of these natural disasters, it is more expensive for the insurance companies to ensure our homes and our properties, commercial and residential. And so what we are finding is that if, you know, if you had hurricane Ida damage, which, you know, we saw a huge influx of those claims being filed within the last two weeks because the statute of limitations was running, which means you only had a certain period to file a claim against the insurance company if they didn’t pay. So if you had a claim or a pending claim or what not, or you a claim that was even paid, it means that insurance company either had to pay it out or likely will pay it out if they were denying it, and they also might be subject to what’s called penalties and attorneys’ fees for the bad faith adjustment of that claim. That’s something that’s very particular to Louisiana. But what it all translates to and what the problem is, is that it makes it expensive for the insurance company to ensure homes in Louisiana.

So the issue that we’re facing now is that so many of the insurance companies that previously wrote policies in Louisiana have decided to back out of Louisiana. Which leaves the state in a bit of a conundrum. We’ve had some legislatures get involved. Legislators, excuse me, get involved to see what they can do. And I know the Commissioner of Insurance has also gotten involved. There was a large tax incentive program to kind of make it more attractive for some of these insurance policies, insurance companies to write policies in Louisiana, especially in areas that I know are very near and dear to you, David, down the Bayou, a little bit. It became, it was almost where homeowners were becoming lopsided, and that the cost of their, their insurance premiums were, were rising above the cost of their mortgage. So it became too expensive for them to financially own their home, and they either had to sell the property or face a situation in which they went without insurance.

Yeah, and that’s, yeah, and that’s definitely if I look at the climate right now, part of the problem. It’s almost as if insurance is now becoming a luxury item as opposed to something that you need to have on your property. The cost is so excessive right now and to take back on something you just said. You know, I have a house, I did not make an Ida claim or an insurance claim on this property. The damage was below the deductible, so I paid it out of pocket. And that homeowner’s insurance, in my particular situation, went up from $6,000 last year to over $11,000 this year. So that’s a nearly doubling of the cost of insurance on that property that I didn’t even make a claim on. And I’m going to tell you, there’s probably thousands of Louisianans across the state right now who are in the same situation where they didn’t even make a claim for damage on their property, but the ripple effects of the insurers spreading cost increases out to all the consumers is hitting all of them. And I’m assuming they’re similarly thinking like me, like, why am I paying double my insurance? But I didn’t even make a claim on this property? Do the car insurance companies do the same to me? If I never made a claim in a car insurance accident, probably not.

The hurricane deductibles are usually written as a separate coverage in insurance policies. So, you know, I would, I would caution all of our readers, go home and read your policies now, because that’s usually a shock, a sticker shock to everybody. That hurricane deductibles are a higher percentage than say, if you just had, you know, a traditional covered insurance expense at your home. And so for a lot of people, you mentioned that it’s a luxury to not just afford insurance, but in my opinion, it’s becoming a luxury to determine whether or not you want to have the option of insurance because the deductibles on multi-million dollar homes, say it’s, you know, 20% you know, on the high end. If it’s your deductible is 20% and you own a multi-million dollar home, you know, what does it look like to come out of pocket for something like that for an insurance claim before they even start to cover the damages. So for some people in New Orleans, it’s financially just not worth carrying insurance. But those, there’s only a certain segment of the population that can withstand, that kind of hurricane damage to their home and be able to come out of pocket for that after the fact. Statistically, in Louisiana, 12% of our residents already go without hurricane coverage to their homes and home insurance coverage. Now that’s not to say that’s their choice. But that is kind of a staggering statistic. In light of the fact that so many insurance companies are backing out of writing policies. One of the options is, it is a state. I don’t, I don’t want to say the word sponsored. I think that’s Ensured of Last Resort. Yes. That’s a better way to say it. Which is basically an option for people to have the, how, how do I put that, the not the least expensive, but they, a last resort for insurance coverage when they cannot get another policy written by another insurance company.

Yeah, and Citizens has always been there for example, in certain locations like Cocodrie, Dulac, Du Large, and Lower Terrebonne, Grand Isle, and what I would consider lower Lafourche, but Grand Isle technically in Jefferson Parish. When some insurers, even in non-storm times, were not, willing to write policies in hyper-risky areas like those, because of the coastal nature of the property and, the low, the low flood level. But now Citizens is taking on way too much of an aggregate of the amount of claims across the state because of how many insurers have pulled out. And I’m going to just before I get, I’m going to get real hot in this, show, fair warning, because well, first I’m just going to give our listeners a disclaimer. Yes, there’s a lot of bad lawyers in the world. And I do not for a minute think that lawyers do not, probably in certain situations, file frivolous claims. We don’t do that here, but potentially are a part of the problem, a small piece of the problem. But my problem is that every time we have an insurance crisis in the state, the first thing that the insurance commissioner, Jim Donilon, who’s going out now, or anybody in Baton Rouge seeks to do is blame lawyers. And I’ll tell you why, because they’re all politicians, and they all know that the easy scapegoat is to blame the lawyers and say that the lawyers are the problem. The real problem to start is that Jim Donilon has had so much money from the insurance companies shoved down his throat over the last 12 years, that he hasn’t done his job. Meaning we had eight to 12 insurers that went insolvent in this crisis of Ida. Why did the insurance company let companies like Southern Fidelity, Lighthouse, and other companies who clearly did not have sufficient reserves to withstand a category four or five hurricane, such as Ida and Laura, write policies in this state? Why is Citizens and the taxpayers of this state paying for the misdeeds of the insurance commissioners office and them allowing insurers who couldn’t pay for these losses? Nobody doubts for a minute that Lloyd’s of London, for example, could absorb any loss. Hell, they’ve insured half of Miami. If Miami went underwater, the reinsurer, which we can do everything right and reinsurance, but Lloyd’s of London would be on the hook for almost all of that, and they could probably withstand the losses because they’re so solvent that they can’t go under. But why are we allowing companies and now we’re not just allowing them, Caitlin. Now we’re paying them to come back. So we’re going to be, I mean, I hate I hate to be the doomsday person here, but we’re and now trying to recruit these not the same companies, but I guarantee you if you went down the regulatory loophole, it would be the same owners and different structures and they just renamed it like A and H Hook Insurance Company. And they came and take the $5 million incentive money. And they come in, we get hit with two new storms and we’re going to have some more companies go under because they didn’t plan, they didn’t properly reserve, and then what are they going to do? They’re going to let the state pay the claims and blame the lawyers. All right, my soap box is over.

No, but you hit a couple really good points, David, and, you know, I admire your passion about this subject because it’s something that impacts every one of us. Whether you’re a homeowner or not, whether you intend to be a homeowner in the future, this is something that we’re having to deal with. And it’s due to consequences beyond our control, right? Like we can’t control when a hurricane hits Louisiana. And I, I get on a similar soap box when, you know, outsiders from other states look at us like we’re insane and just say, well, why would y’all live there? You know, and I don’t have to answer that question. You know, if you, if you want to call in or Skype in and let us know why you want to live here, I think that’s a really, a really easy way to answer. And the fact of the matter is that so many of the people don’t have the option to just pick up and move if we wanted to. But I think everybody here knows that there’s a reason that we all live here and there’s a reason that we put up with these storms, but it’s not as you said, David, so that we can go and use tax resources and state resources to then have to pull back in insurance companies. And in June, I think the most recent update was that some of, from some of those tax incentive programs with the, quote unquote, new companies that have come in and decided to write policies, that really they only got about 23,000 policies, new policies written. Those were not renewal policies, those were new policies that were previously rejected by the prior insurance companies in the state, compared to the now 130,000 existing policies under Citizens. So there’s still a huge discrepancy even with that tax incentive program to get these new insurers back in the state. And it really doesn’t necessarily solve the problem of what happens when another storm hits. Which is something that’s, yes, it’s unfortunate, but it’s a reality that we all have to face and plan for. And in looking into this a little bit more, I just kind of wanted to get a realistic take of what are people actually doing. You know, I don’t really have the flexibility. My choice was to pay my higher premium and have my house insured. You know, and, I’ve reached out to people to talk about what was going on, just kind of like a boots on the ground situation. And I even had one person tell me that he has decided to forgo insurance completely. It got too expensive. He said it wasn’t worth it. He didn’t want to have to fight the insurance companies after. In his defense, he said, I don’t look, I’m not interested in filing lawsuits to get something paid for that I paid to get in the first place. And that’s not. That’s not inaccurate.

Well, and let me just hit you with the real problem. So, and because I’m sure after I’ve been on my rant, the first thing I always get from people is, well, what, what are some solutions to problems? So I’ll give you one right now with an example. When I moved to downtown New Orleans and barely drove anymore, my car insurance went up when I moved from Lakeview, which is a somewhat suburban area in New Orleans. So I never could fathom in my head, this is years ago, why would the insurance company increase my premium when I became less of a risk to them because I’m driving less, I’m on the road less. It makes no sense, right? Individualized, they’re not really properly underwriting my policy from my perspective. But right now, there was a, there was a study in 2019 done by the Bayou Brief. And this is a study about auto drivers, and they compared premiums. Look, you know, Farm Bureau, much more, much more transparent than most insurers. And an insurance industry expert, Dean Heller, did this study with Farm Bureau’s records because they opened up some of their credit rating and how they wrote their premiums. In 2020, per this study and consumer reports, a driver with a clean driving record, okay? And excellent credit, so a wealthy person with a clean driving record, paid an average of $1,899 annually for their car insurance. That same person, driver, clean driving record, but with poor credit, so a poor person, paid $3,489 annually. So in this state, unlike some other states, we do not force the insurance companies to provide their rating and underwriting procedures prior to writing policies in this state. So there is no uniform requirement in Louisiana, for example, in the car insurance industry on how they’re going to rate and how they’re going to write policies, which affects the premiums that you’re being charged. So you might say, well, why would the insurance company give the wealthy people a cheaper premium than people who have less money? And I’m not going on a Robin Hood adventure here. That’s not where I’m going. It just seems ridiculous, right? If you’re going to truly underwrite the risk of a person, it should be what is their driving record? How dangerous are they? Okay, you can use certain factors besides like their claims record to understand their danger. But how is wealth any indicator whatsoever of their driving record and their risk to the insurance company and a claim being made? And why is it? It’s because the wealthy people, okay, the people with more money who buy policies, whether it be middle, upper class, and lower hot, and higher class people, they are more likely to buy life insurance. And homeowners insurance, and other insurance products that insurer wants to bundle and make more money from. So they charge them less on the car insurance side, which is insane. Insane that this state allows that to happen from the car insurance perspective. But the truth of the matter, once again, is that Jim Donilon has been paid off by all the calling, car insurance companies, and the same one-trick pony that he has done every single time is when an insurance company increases rates or pulls out of the state is he blames the lawyers. I read an article about Tim Temple yesterday, the incoming insurance commissioner, who wants to propose a special legislative session for insurance reform because of the insurance crisis. And guess what his first solution was in the insurance crisis reform? Litigation reform because the lawyers are the reason that hurricane Laura, Zeta, and Ida hit Louisiana. Like the lawyers are the problem. And the reason the insurance companies didn’t pay to repair the damage that you sustained because of it. Correct. And that is, I’m assuming that is going to follow the bill that was passed in Florida. A very similar legislative bill that basically aimed at not the insurance companies, not the insurance industry, is not the underwriting policies behind how we all received insurance. Or have been forbid the actual reason why we’re sustaining these catastrophic weather events at an alarming rate. But I won’t get on that soap box either. It was aimed at strictly litigation. And the intent behind the Florida bill was simply to make it more difficult to litigate a denied claim. An insurance denied claim. So what that means is, if and when a hurricane comes, much like the one that just came in Florida, unfortunately, if the, if you file a claim with a satisfactory proof of loss, meaning you show all the documentation, you submit everything timely to the adjuster. If the insurance company decides to deny your claim, that Florida bill makes it much more difficult on homeowners, policyholders, to then go litigate after that improper denial. One of the things that the Florida bill did that I would assume Louisiana is going to aim to do as well, is remove the, the benefit of having penalties and attorneys’ fees applied to any wrongful or bad faith denial of an insurance claim. And this is really big in Louisiana because a lot of what that does is its deterrent. It’s deterrent to want to promote insurance companies to pay the claims that should be paid. Well, and one of the things too is, I mean, candidly, Caitlin, if you look at it from the perspective of, what is a, what is a main cost driver? What has made this cost more? If you look at from 2017 until today, it’s the last six years, we have had eight major hurricane landfalls on the Gulf Coast. I mean, you may not realize that many, but I’m going to start from the left and Texas. Harvey, Laura, Zeta, Ida, Michael, Idaiyo and Irma. So we have had eight major hurricanes hit the Gulf Coast in the last six years. That is completely the cost driver here. That has caused the insurance company to have way more claims than they planned for. And by the way, that’s their job is to ensure us and to plan for losses and to set reserves and to ensure that they have sufficient funds available to pay for the reserves. Now, the other thing that’s really impacted that is just think about it in a common sense standpoint. We’ve had COVID. COVID drove product cost increases. So for a contractor in 2019, who could come out to your house and fix a certain item, I don’t know, maybe fix all your drywall, replace the floor. Let’s say they could do that in four or five rooms for $20,000. I can guarantee you before COVID, that price is at least twice, maybe three times more now. Well, the insurance companies, actuaries were probably not accounting for nearly, you know, historic levels of cost and inflation. Both at the product side, meaning materials, wood, flooring, you know, anything like that. Shingles, all the way to the profit side that the contractors have to charge more on top of all that. So the costs have nearly doubled and in some cases tripled, which means that the insurance companies’ claims are harder than they had potentially planned for, if they planned for it correctly, which they probably didn’t. And the solution, I would posit, is certainly not to blame the lawyers or the people who have to get hired to go and represent people who are just trying to make the insurance company do the one thing they’re supposed to do, that they never want to do, which is actually pay a claim. Which we pay them to do. Correct. Well, and one of the other problems too is that when all these companies go, eventually go bankrupt, like they have here in Louisiana, they revert to what’s here in Louisiana called LIIGA. It’s the Louisiana Insurance Guarantee Association. And it is kind of a catch all. And so these claims just somewhat exist in infinity. And while LIIGA has dedicated adjusters within the LIIGA system to continue to adjust and try to resolve and pay out these claims, it certainly does not move quickly. And so what we’re faced with now is homeowners who have insurance claims resulting after Ida, who made the claim immediately after Ida, and now they’re stuck depending upon your insurance company, you’re stuck in the LIIGA system now. And that’s not getting resolved anytime quickly. And so you’re years down the line, and one can only hope that homeowners have the disposable funds to make the necessary repairs while they’re waiting on this type of litigation to be resolved. And that’s, to me, is one of the most, egregious, egregious issues of the system is that there’s really no recourse for people who are faced with these circumstances, who live here with or without option. And unfortunately, I wish we had some better news for everybody. I do feel like this has been a bit of a doomsday topic, but it’s something that I think we all need to recognize. Of course, brainstorm to see how we can be open to suggestions, what, what is good for each individual, person or family or household, business owner, residential owner is going to vary from person to person. But I just know that this has been talked about quite a bit in my circles and it’s, I really have no, no great advice to anybody except, you know, get ready for more of what’s to come.

Well, the biggest issue is I saw, back in, I guess it was March or April, Jim Donilon came out and of course, he has one answer to everything, one solution to everything, which are the problems he caused, which is to blame the lawyers and to back what they call tort reform, which was going to fix and be a panacea and fix everything. Okay, two years ago, people may or may not recall this or may or may not have been paying attention to this. But the quote unquote, tort reform in 2021 was passed in the legislative session in Baton Rouge. And two years ago, Jim Donilon in 2021 promised everyone under oath, and it’s all recorded, it’s on video, and he basically said, if you pass this bill, auto insurance premiums will decrease. Do you want to know what’s happened in the last two years? Auto insurance premiums have been increasing. So the alleged answer, the panacea that Jim Donilon and the purveyors of quote unquote, tort reform keep promising us to the insurance issues that we’re having in this state, that is not only attacking the lawyers, but restricting consumers’ rights, meaning taking rights away from you when you have a claim or you have a loss that you have to file a claim or a suit against the insurance company, you paid to take care of you when you do, restricting your rights. Now, right now, it may not be a thing that makes you real angry. But you never know when you’re going to be put in the position that I was not put in after Ida. I don’t want a rental property. I had Lloyd’s of London, they came out, they adjusted it quickly. They were very fair with me. They replaced the roof, it needed to be replaced, they treated me more than well, they paid me, I fixed my roof, that was that. Okay. I didn’t hire a lawyer and try to suck money out of them or make a claim out of something that wasn’t that. They just did what they were supposed to do, and I appreciated it and I also recognize that I probably just got lucky because I had a good adjuster who did it quickly and did it fairly and didn’t delay the process. It’s kind of how it should work, right? But not everybody has had that experience. In fact, thousands of Louisianans since Ida have not, nor Lauren Zeta. And most of the time they don’t have that experience when they’re in a motor vehicle collision. The insurance company that they either paid to protect them is.

The adverse insurer, look, it’s not a secret, they’re in business to pay them as little money as possible. So the idea that reform is just going to all of a sudden fix the home owner’s insurance crisis, you’d have to be an idiot to believe that by looking at objective evidence of the man who said in 2021 that auto premiums would go down and it is now a fact, not a belief or an opinion, a fact that they did not go down and he lied to now the same person who is now purveying the same solution to the home owner’s insurance crisis. I mean, it’s just rank idiocy and I refuse to believe it and I refuse to let anybody who asks me be treated like they don’t have the mental capacity to understand basic facts and logic.

Well, and something that we’re going to have to look out for in the upcoming months and years and the new legislative session is what is the impact of the Florida bill and some of the neighboring states who have passed similar bills. Much like you said, David, what are these promised consequences that will come from this and do they ever eventually come, or is this just efforts by the insurance lobbying industry to make it less expensive, make it more profitable for them to continue to write insurance. And, you know, I tend to agree with you, I don’t know that there’s going to be any real benefit to the policy holders, whether it be car insurance, home insurance, what not. I think we see enough of it in our day-to-day that this is unfortunately, just something that people are going to have to deal with in this day and age. And, you know, I think there are certain situations in which the insurance companies do adjust claims appropriately, and pay them out exactly like they are paid to do and that they are in the business of doing. But maybe it’s because of what we do on a day-to-day basis, but I think it’s more often than not, that they don’t. And so the question that everybody should be asking themselves is where does that leave you as an individual? Whether your home gets damaged or whether you are involved in a motor vehicle accident, where does it leave you when that insurance company says, no, I don’t think you have a compensable claim, or no, I don’t think that your home is as damaged as you say it is. You know, and to me, it’s a very, it’s, it almost takes like a subjective element to this, like you said, like it might be the luck of the draw depending on which adjuster comes out to see your house or which adjuster comes out to see the property damage on your car. But at the end of the day, even if it is subjective, we as individuals should still have the ability and and recourse against these companies that we pay to do a job for us because at the end of the day, when you really think about it, we are, we pay them.

Yeah, and you and and my biggest frustration is I’m not like advocating against insurance. I mean, I want everyone to have insurance. I’m a proponent of insurance on everything you can possibly insure to protect against a loss event, to protect for a loss event. But to really break down, they come in and fight and what’s going to happen if there is a special legislative session in January of next year or if quote unquote, toll reform is put on the table as it relates to first party insurance is this. Right now, if you own a home and you have homeowner’s insurance and there’s a claim, there’s a tornado or a hail event or a hurricane and you suffer a hundred thousand dollars in damage and the insurance company refused to pay you, you have to go get a lawyer. You do, because the insurance company is not going to pay you. And in Louisiana, there are only six, seven or eight situations where when you go hire a lawyer, that if you have to pay that lawyer, which you will, some percentage of whatever money you recover, that you can recover your attorney fees. And right now, one of the arenas where you can potentially recover your attorney fees is if when you make a lawsuit for that hundred thousand dollars, if your lawyer can prove that the insurer was in what’s called bad faith for refusing to pay your claim. And what the proponents of this legislation are going to say is that we should get rid of that law and that you should not be able to recover the attorney fees for having to bring that lawsuit. Now, think about that for one second. That means if that law passes, when you make that claim for a hundred thousand dollars, you can go all the way to trial and you can win a trial and then you can get your hundred thousand dollars, but you’re still going to lose because you’re still going to have to pay your lawyer a percentage of that hundred thousand dollars and when you go to fix your house, you’re not going to have the hundred thousand. You might have 60. You may have 65 or 70, depending on one, what percentage, you know, lawyer took from it, for us to go to trial costs 40% because of the risk we take and the costs we put out and most other lawyers in the state are like that. And so you’re going to be underwater and just putting you back where you were before the event happened. Right now, we have bad faith laws, which allow you to get 50% of that hundred thousand. So an additional 50,000 dollars. Plus you can recover your attorney fees. So in that scenario, you could possibly recover 200,000. After you pay your lawyer, you have a hundred thousand to fix your house and then you’ll have a little bit of money left over as well for the probably year and a half or two years you had to go through litigation with the insurance company. What the insurance companies are going to advocate for is to get rid of the attorney fee awards and probably the bad faith penalties too, which is the only stick and lever out there because it leverages them and makes them financially responsible for not treating the insureds the way they’re supposed to. And that is the only thing in our law right now protecting consumers when it comes to first party claims. And so if that gets on the chopping block, you should pay attention, you should call your legislature, and you should call the insurance commissioner’s office who at that point will be Tim Tampley. I don’t think he’s opposed. And advocate for not changing the law. I mean, I would have, I would have advocated years ago, after Laura hit Southwest, Louisiana, there was advocacy groups who were working on making the bad faith laws more onerous and I can’t believe that we have come to a place now where we have had three loss events, which have been terrible for the state and a lot of people have been through a lot of pain. But are we really going to talk about taking away consumer protections right now? Is that really what we’re going to talk about? Is not protecting the insureds and figuring out how to make it more financially advantageous for the insurance companies who many of whom shouldn’t have ever been writing policies in the state. Lighthouse, Southern Fidelity, go down the line, they weren’t even financially solvent to begin with. And we’re going to talk about how do we protect them more at the cost of the everyday person? It is mind-boggling to me when I read this stuff and see people proposing this, the absolute gumption and guile that they have to propose that at this time is absurd.

And that’s my question too, David, is, you know, maybe we do need a reform, but where should the reform be aimed? Like you said, like a lot of our clients who come into us, have never had prior lawsuits, don’t want to have a lawsuit. We get it. Nobody loves to deal with lawyers. But it is. I would either. It is truly their last option. And so instead of aiming the reform at the last option for policy holders, why are we not having an open discussion and why are the why the legislation, why is the legislation not looking at what the insurance companies should be doing differently? Should they be implementing different underwriting policies, like you mentioned earlier with the motor vehicle policy and the premiums in that regard? Should they be implementing better training for their adjusters? How do they adjust a claim? How do they timely pay a claim? Should they be implementing better training for setting reserves or regulations, better regulations, more stringent regulations on how reserved they have to be in advance of one of these catastrophic events? Especially for places like Louisiana where we can pretty much guarantee that we’re going to have another one of these events within the next five years.

Well, it’s important too, for the listeners to think when you are renewing insurance and you are looking at the cost of insurance. Cheapest isn’t always the best. You do want the cheapest insurance, but do your research on insurance companies. For starters, every single insurer in the state, you can go to Louisiana Department of Insurance website. They have publicly published data on what their outstanding liabilities are and what their reserves are. So they have to report that data to the LDI and it’s publicly available online. All you have to do is Google search it. Second, there are actually really interesting when you look at it too. I would encourage people to look past the dorkiness of all this and really go take a look at it. Second, there are other resources online aside just from the LDI website, I website, which rate insurance companies. Some are reputable, some are not, but that can give you an idea if they have an A+ rating and A rating, different ratings to understand how financially viable is that insurer. Okay, let’s just be clear. I mean, I’m not just advocating for Lloyd’s of London, but they’re not going under, right? Unless the United States is underwater. Lloyd’s of London is not going under because three or four hurricanes hit Louisiana. And in the same vein, neither is State Farm, right? I mean, they’re just too big for three events to make them go under. But like if you’ve never heard of the company before, that’s probably when you should start doing your research. And I’m not saying that, you know, not every company has as aggressive of a marketing campaign as Geico, farmers, or State Farm, where you see their commercials all the time. Understand their jingles and know which Athlete endorses them. Those aren’t cheap. And so certainly there’s other companies like Lexington and, the first one that popped in my mind, they don’t do a ton of marketing, but they write big policies. They’re a big company, they’re probably not going under because of three. They’re more in the commercial, I think, and industrial space. But do your research on the insurance company. And at the end of the day, if you can spend another hundred or $150 on a company who’s got a bigger reserve, a better rating, and a stronger viable company, if your family can afford it, pick the more viable insurer, because the inverse is if they go under, then you’re stuck making a claim against LIGA, the Louisiana Insurance Guarantee Association, and that claim for bad faith penalties and attorney fees completely goes away. LIGA will probably pay your claim out of the state’s coffers, but you’re going to be underwater if your insurer goes under. And what it’s going to cost to fix your property versus what you can get from LIGA. And we have, unfortunately, are having a lot of people go through that right now. And it’s not a fun thing.

Well, and I’m going to piggyback on that. What you just said, David, too, just for our listeners and viewers. Please read the policy. You know, it’s, they’re boring. We get it. You know, we’re lawyers, we’re paid to do it, but at the same time, please read your policy. So much of what’s contained in a policy and so many issues can be resolved on the front end. And you know, exactly what is and what is not covered. And look, they can be a little confusing to read. If you need help, call us. We’re here. We see them all day, every day. But read your policy. You know, what you can make a claim for. It’s better that you know exactly what you’re going into a claim with, then you don’t. And that’s just something I think is so overlooked by people all the time because it’s, it’s a big bulky document that nobody ever wants to read, but it’s worth it. The other thing to keep in mind is especially from a consumer perspective and a listener perspective, we just talked about the cost of inflation and how it has affected insurance costs to everybody because the cost of materials, building, everything is highly inflated since COVID and with and with the general rate of inflation and what’s been going on in the economy. That applies to what insurance coverage you have. So you need to talk to your agent and ask them that most agents who are reputable that are writing your policies, I know mine, been knowing them forever, they’re wonderful people, Riverlands Insurance over in Louling, the Labatts, good people, shout out to Renee and his family. They will run math on a per square footage price and tell you if you have adequate coverage for dwelling or not. And since, you know, I just thought about this after COVID and I’m glad I did and I went and talked to them about it and they reran it and I was probably underinsured by 100 something thousand dollars on my dwelling policy, which would cover the property, just because of how much more expensive it would be to fix something, everything, if the house burned down, flooded or a mass, God willing and never happens, you know, a tragic event happens to a property of mine. So go to your agent, ask them about your policy coverages and most of them have these tools in house for free. That’s what they’re there for. They’re trying to help you make sure you’re adequately covered. Don’t just rely on coverages that you had in 18 or 19 or 20 anymore, they’re not good. They’re not good. It’s going to cost at least 50 to 100% more than it used to fix your property in a first party context. So make sure you’re really analyzing the coverages and talking to your agent and getting good advice on what your coverages needs to be. And that brings up a, my final point, but if you were one of those families during COVID that built the pool in the backyard, built a built any kind of like entertainment system in the backyard, if you made improvements to your home because we were all stuck in them for years at a time, go get an updated renewal quote. I cannot tell you how many people come in here and they have updated quotes and they realized that their other structures on their property or their big very beautiful expensive fence that they built during COVID, to have a private sea yard, is not covered under their existing policy and, you know, what if at that point you’re a bit out of luck? There’s only so much we can do for you. But that’s, that’s my last soap box piece of advice on this topic.

Yeah, and I have a personal perspective on why I like Riverlands, for example, they’re an independent agency and this isn’t to indict anyone who’s captive with a particular insurer, but competition is better for anything and any market in my opinion, in life. So you want to have an agent quoting your policies across all mediums, whether it’s car insurance, home insurance, or anything like that. The more quotes you get, the more competition for your business, the lower price you’re going to get. And that is obviously a part of the reason that we’re having this crisis in the home owner’s insurance market is everybody’s evacuating, both Louisiana and Florida, right now, because it’s risky, just like they did after Katrina. You know, but there’s such a big market and there’s money to be made, they’ll all be back once we, God willing, have some calm storm seasons. But, you know, we have less options in the market right now. And that is a purely economic driver of the problem is that there’s just not enough competition right now. And so certain insurers are super high, and there’s not enough people competing for the business and they’re not being forced down for your business. And that’s just logic. That’s a basic economic factor about what’s happening out right now, out there right now. But for the most part, you can get as many quotes as you can have your agent run it against as many companies as possible and ask your agent, how many companies did you bid this to? Is there anybody you didn’t bid this to? Is there anybody I should go to and bid it to more? And just go through that process and get as many bids as you can. So well, fascinating topic. I told y’all it was going to be hot. I don’t think I ever cooled down from the beginning to the end. Y’all are welcome. I can probably go on this topic for another three shows. I’m sure when this gets published, I’m going to get some text messages. Boy, you were really going at it, weren’t you? But, hopefully, everybody is withstanding this crisis from a standpoint of how their family is doing. I hate to think that there are a lot of people, going without insurance. And that it’s almost becoming a luxury item. That’s a dangerous proposition because I’d hate to think that people would lose the equity and value of property in their families and that’s because of a tragic loss event, and that’s a scary thing. So hopefully, there are some answers that come forward. I know this will be a heated topic, in the months and years ahead, as hopefully our insurance market finally stabilizes. But thank you, Caitlin, for taking us down this topic range. I hope this has been interesting to all of our listeners and Caitlin, thanks again for co-hosting with me. It’s always a pleasure. Thank you. All right. Thank you so much to everybody for listening. This has been the Overruled podcast, brought to you by the Scott Vicknair Law firm. Can’t wait to talk to you and we’ll see you soon. Scott Vicknair, injury attorneys. We fight for the win. Information is for illustrative purposes only and does not constitute tax, investment, or legal advice. Always consult with a qualified investment, legal, or tax professional before taking any action.