Louisiana, a state with nearly 5 million people, is known for its rich history, swamplands, Mardi Gras and some of the best cooking on the planet. Mardi Gras is an ancient custom that originated in southern Europe. It celebrates food and fun just before the 40 days of Lent: a Catholic time of prayer and sacrifice. However, it is not all fun and games. Due to the amount of swamps, bayous, bays and sounds in 7Louisiana, the state actually has the one of the longest coastlines of any US state at 7721 miles and makes up 40% of the nation’s wetlands.
Being below sea level presents extremely high risks for some of its own for homeowners. Louisiana is generally split into 2 parts, the uplands in the North, and the alluvial towards the south and along the coast. The uplands consist of prairies and woodlands. Homeowners in this area are likely distanced from fire stations causing fire risks that have lead to millions of dollars in claims for homeowners insurance companies. The alluvial consists of low lands, swamps, and coastlines. These particular areas are prone to flooding and hurricanes making both flood and water claims very common.
Hurricane Katrina, one of the most memorable storms to hit the U.S, caused an estimated $125 billion dollars worth of damage. Many people know that Louisiana was deeply affected by Hurricane Katrina, but many people do not know that Hurricane Rita, the fourth-most intense Atlantic hurricane ever recorded and the most intense tropical cyclone ever observed in the Gulf of Mexico, hit Louisiana just one month after Hurricane Katrina. The combined effect of Hurricanes Katrina and Rita was the destruction of an estimated 562 square kilometers (217 sq mi) of coastal wetlands in Louisiana. Many homeowners insurance companies have deemed entire regions of the state as high risk as the susceptibility for claims is an unavoidable hazard.
Frequent rains hit this state producing for 60 days of thunderstorms a year. With these thunderstorms come tornadoes. Louisiana is hit with 37 tornadoes annually causing, for many insurance companies, a higher than expected amount paid out to policy holders for damage received.
The Louisiana Citizens Property Insurance Corporation, commonly known as the Louisiana FAIR Plan is a back-stop for many homeowners whether their inability to obtain home insurance is based on claims or simply geographic area. The Louisiana FAIR Plan is known as the insurance of last resort and consumers are urged to find a policy in the private market.
These types of weather events and natural hazards have lead homeowners in Louisiana to focus on mitigating their homes both for safety and to reduce the occurrence of homeowners insurance claims due the extensive damage that this severe weather can cause. Many insurance companies now have responded with different deductibles, surcharges or credits for consumers, not only based on the age of the roof, the type of roof and materials, but also the mitigation done to prevent floods. Consumers will find themselves more and more looking toward mitigating risk both to protect their possessions, their insurance premiums and eligibility.