Insurance agents race to find new coverage amid a mountain of policy cancellations

“This is the worst I’ve ever seen it,” one agent said.
Published: Jun. 18, 2022 at 9:41 AM CDT
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NEW ORLEANS (WVUE) - Insurance agents are feeling the pressure as they scramble to find new coverage for tens of thousands of Louisianans who are losing their insurance this month and next month.

“I worked until 2:30 in the morning writing policies,” Ross Fayard, owner of Amstate Insurance says.

Fayard was already dealing with finding new coverage for people losing their insurance in June, and this week, Insurance Commissioner Jim Donelon announced that another insurer is canceling thousands of policies in mid-July.

“I’m running, you know, me like a bunch of other agents, we’re running on no sleep. This is the worst time it could possibly happen,” said Fayard.

Earlier this week, Fayard told FOX 8 he had about 800 customers affected by upcoming cancellations and on Friday, he said it had increased to over 1,500 policies.

“I’ve been hit by this with almost 1,600 policies. It’s ridiculous,” he said.

More: Nearly 100,000 Louisianans set to lose homeowners insurance this summer

Donelon says he knows it is a frustrating time. But he urges those losing their coverage to contact their insurance agents about getting new insurance.

“I recognize the agents in many cases are overwhelmed. I have agent friends,” said Donelon.

Come June 30, Lighthouse Excalibur will cancel 30,000 policies and Maison will end 12,000 policies. Southern Fidelity will cancel 42,000 policies on July 15.

Insurance agents overwhelmed by policy cancellations
Insurance agents overwhelmed by policy cancellations

Fayard says it will be hard to place the affected properties so fast.

“On July 14, of that 42,000, I promise you’re not even going to be halfway through all agents finding places for those people,” he said.

And agents say private insurers are becoming more selective in who they take on as customers. However, Donelon insists companies are still writing policies.

“You know, he [Donelon] says there are some companies actively writing, okay, yeah. But you know what? Their criteria to get with them is so tough because they don’t want to write all this business. So they got to put a criteria on what to accept,” said Fayard.

There is also Louisiana Citizens, the state’s insurer of last resort.

“Policyholders who are unable to find a policy in the private market will be able to find a policy from our state insurer of last resort, Louisiana Citizens, but that has to be done through an agent,” said Donelon.

Some policyholders are just learning that they will lose coverage soon.

Insurance Crisis
Insurance Crisis

Donelon says there was no way to notify them sooner given the process which includes the courts.

“The notification went out immediately when the judge did sign the order of liquidation. It couldn’t be sent out before that because we didn’t know the date that it would be signed until then,” he said.

Still, customers and many insurance agents are overwhelmed by the insurance problems.

Jim Donelon: Insurance crisis grows
Jim Donelon: Insurance crisis grows

“I’ve been in this business almost 19 years and this is the worst I’ve ever seen it. And, I have never seen this many markets get dropped all at the same time,” said Jennifer Clements, with Dan Burghardt Insurance.

“I have never seen in the history of writing insurance this bad,” Fayard says.

St. Tammany Parish President Mike Cooper also commented on the insurance cancellations.

Cooper issued the following statement to the news media:

“Canceled insurance policies, rising premiums, increased utility costs, inflation and fuel prices are all impacting St. Tammany Parish’s families immensely. The heat of summer and the onset of Hurricane Season aren’t making it any better. Although insurance rates are not within my control, I will pursue every available option as Parish President to advocate for the citizens I serve.”

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