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Started By
Message
Good News: More Insurers coming to LA. Bad News: Most of them suck
Posted on 5/6/24 at 10:16 am
Posted on 5/6/24 at 10:16 am
LINK
So more companies writing policies here should help reduce premium increases (but I doubt we see any premium decreases). However, if we actually have a storm, they will all likely fail. Which ultimately means dealing with LIGA, and then LIGA passes on the cost to the remaining insurers.
Rinse and repeat.
It would be helpful if this is broken down by area. If the large insurers are gaining market share in central and north LA, that's not helping the real issue that's happening in south LA.
quote:
A review of new state market share data and financial filings shows the void left by the failed companies has largely been filled in two ways. Some of the market has been gobbled up by new firms that structurally resemble the ones that failed. And the rest has mostly gone to Louisiana Citizens, the state-backed insurer of last resort, which by law charges policyholders above-market rates.
All of it raises further concerns about the health of Louisiana’s insurance marketplace.
quote:
Most of the fastest-growing private companies are rated by Demotech, the firm that rated all 12 of the companies that went belly-up after the storms of 2020 and 2021. In the insurance world, the gold standard is A.M. Best, which rates larger firms like State Farm and Allstate. Researchers have recently raised red flags about Demotech’s ratings, suggesting the companies it rates tend to be of “significantly lower quality,” are often undercapitalized and have a riskier book of business than other insurers.
Those attributes were common among the insurers that collapsed here, many after rapidly gaining market share in the years leading up to 2020. Several of the new companies share another similarity with the failed firms: They use an affiliate model that allows them to farm out many functions – and premium dollars – to less-regulated affiliates, an arrangement that has raised concerns among some regulators and some observers of the industry.
So more companies writing policies here should help reduce premium increases (but I doubt we see any premium decreases). However, if we actually have a storm, they will all likely fail. Which ultimately means dealing with LIGA, and then LIGA passes on the cost to the remaining insurers.
Rinse and repeat.
quote:
Of the 10 companies that have gained the most in market share from 2019 to 2023, five are smaller regional firms rated by Demotech. Four of them use the affiliate model. Four of the biggest gainers, meanwhile, are larger national insurers, although one of them, AllState, simultaneously shrank some of its subsidiaries, offsetting the gains.
It would be helpful if this is broken down by area. If the large insurers are gaining market share in central and north LA, that's not helping the real issue that's happening in south LA.
11
Posted on 5/6/24 at 10:17 am to LSUFanHouston
quote:
suck
quote:
Insurers
You don't say?
Posted on 5/6/24 at 10:20 am to LSUFanHouston
Insurance companies are like blowjobs.
The more you have access to the better.
The more you have access to the better.
Posted on 5/6/24 at 10:34 am to LSUFanHouston
You are looking at historically high insurance premiums. Companies coming in and offering some relief from that is good as the rates of the last year and a half or so are not really sustainable for homeowners
Your premiums will still be higher than what you are use to prior to the run of hurricanes over the last 5 years, additionally you will likely not be seeing flat $1000-$2500 deductibles. In places like Orleans and Jefferson you will still likely be seeing 3%-5% storm deductibles as the norm
These companies will have higher deductibles, higher premiums, and broader restrictions for qualifying than those that were present prior to IDA
The problem will be if we start going several years without major incidents and then new companies start to come in continually try to undercut each other, offering premiums that aren't sustainable in the region.
The birth of a lot of companies that went under after IDA were born out of the corpse of hurricane Katrina. A few years after Katrina opportunistic individuals took advantage of the vacuum that had form and they came in with too good to be true premiums and they were allowed to do it. They set up the company knowing they would be selling in in a few years and leave another group holding the bag
Your premiums will still be higher than what you are use to prior to the run of hurricanes over the last 5 years, additionally you will likely not be seeing flat $1000-$2500 deductibles. In places like Orleans and Jefferson you will still likely be seeing 3%-5% storm deductibles as the norm
These companies will have higher deductibles, higher premiums, and broader restrictions for qualifying than those that were present prior to IDA
The problem will be if we start going several years without major incidents and then new companies start to come in continually try to undercut each other, offering premiums that aren't sustainable in the region.
The birth of a lot of companies that went under after IDA were born out of the corpse of hurricane Katrina. A few years after Katrina opportunistic individuals took advantage of the vacuum that had form and they came in with too good to be true premiums and they were allowed to do it. They set up the company knowing they would be selling in in a few years and leave another group holding the bag
Posted on 5/6/24 at 10:34 am to LSUFanHouston
Thanks Jeff.
Posted on 5/6/24 at 10:59 am to LSUFanHouston
Shitty insurers are better than no insurers. Hopefully prices come down due to competition.
Posted on 5/6/24 at 11:07 am to The Mick
quote:
Shitty insurers are better than no insurers.
Tell that to any random 10 people in Lake Charles and 6 of them will fight you.
Posted on 5/6/24 at 11:09 am to LSUFanHouston
My sisters policy in Ascension went up to $6,200 with Farm Bureau recently. I got her $90,000 more dwelling coverage, $200,000 more liability, and 1% all other perils AND 1% wind/hail deductible with USAA for $2,500.
If you don’t qualify for USAA, you’re getting arse raped in south Louisiana.
If you don’t qualify for USAA, you’re getting arse raped in south Louisiana.
This post was edited on 5/6/24 at 2:20 pm
Posted on 5/6/24 at 11:20 am to TDsngumbo
quote:
If you don’t qualify for USAA, you’re getting arse raped in south Louisiana
Not true, although that statement was somewhat true immediately after IDA and for several months after that when USAA was saving many people from having to get citizens policies
insurance is one thing you definitely can not compare anecdotally
This post was edited on 5/6/24 at 11:22 am
Posted on 5/6/24 at 11:43 am to TDsngumbo
quote:Is USAA writing new policies in South LA now? There was a time when they weren't (I think).
If you don’t qualify for USAA, you’re getting arse raped in south Louisiana.
Posted on 5/6/24 at 12:10 pm to The Mick
Yes they are. At least in Ascension Parish.
This post was edited on 5/6/24 at 12:11 pm
Posted on 5/6/24 at 12:52 pm to TDsngumbo
I have USAA on both my houses. Pay $2600/yr on the one in BR we're about to sell. One in Virginia is worth twice as much and we only pay $1100/yr there.
Posted on 5/6/24 at 12:54 pm to The Mick
quote:
Shitty insurers are better than no insurers.
In so far as you need to have insurnance to keep the mortgage company off you... sure.
But if the SHTF you won't feel that way.
Posted on 5/6/24 at 12:56 pm to TDsngumbo
Everyone wanted the lowest premium, 9/10 didn't give two damns about AM Best rating. I only quote personal lines for commercial clients, call ins only want to get the best #. Many have bought too much house and may have to limit that travel ball schedule going forward to afford their house insurance premium.
Even the Graywood poors are bitching about their home insurance.
Even the Graywood poors are bitching about their home insurance.
This post was edited on 5/6/24 at 12:57 pm
Posted on 5/6/24 at 1:41 pm to KemoSabe65
quote:
Everyone wanted the lowest premium, 9/10 didn't give two damns about AM Best rating. I only quote personal lines for commercial clients, call ins only want to get the best #. Many have bought too much house and may have to limit that travel ball schedule going forward to afford their house insurance premium.
Everyone’s an absolute retard when it comes to their expectation of how their house should be insured. I’ll never not smirk when someone says “my house isn’t worth anywhere near that” then in the next breath bitch about how much things cost nowadays
Posted on 5/6/24 at 5:56 pm to LSUFanHouston
I would love to know what the Demotech ratings were of these companies immediately prior to their folding....
Here in NWFL, we have similar issues.
Here in NWFL, we have similar issues.
Posted on 5/7/24 at 11:18 am to KemoSabe65
quote:
Everyone wanted the lowest premium, 9/10 didn't give two damns about AM Best rating. I only quote personal lines for commercial clients, call ins only want to get the best #. Many have bought too much house and may have to limit that travel ball schedule going forward to afford their house insurance premium.
Some oversold and some don't care.
Some, AM Best doesn't rate who offers here. In St Bernard there are very few companies writing.
Some bought too expensive of a house but that's partially because housing has gone up so much in price.
Posted on 5/7/24 at 11:30 am to LSUFanHouston
And the legislature just made it more difficult to sue and recover for any increased suckitude. For the People!
Posted on 5/7/24 at 11:55 am to LSUFanHouston
quote:
Several of the new companies share another similarity with the failed firms: They use an affiliate model that allows them to farm out many functions – and premium dollars – to less-regulated affiliates, an arrangement that has raised concerns among some regulators and some observers of the industry.
These companies are formed to extract premiums from Louisiana citizens and that's about it. They gladly gobble up risky policies from Citizens, ship the premiums off to out of state investors via affiliates, and then when a storm hits they are shocked to discover they have not purchased enough re-insurance to cover claims, declare bankruptcy and leave the mess for LIGA. Rinse and repeat after every major storm.
Donelon gave them millions to do this. Temple is making it easier for them to raise premiums and divert even more money to the affiliates. It's a joke.
Posted on 5/7/24 at 12:05 pm to LSUFanHouston
This is anecdotal, but my parents recently had to pay their property insurance and it went up about 150%. They also got a new vehicle recently and the insurance on it is $6k/year.
They’re fed up and looking to get out for good. I can’t say I blame them.
They’re fed up and looking to get out for good. I can’t say I blame them.
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