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Why Louisiana residents struggle to get property insurance during hurricane season.

LEILA FADEL, HOST:

Tens of thousands of people in Louisiana are scrambling to get property insurance in the middle of hurricane season. Most big companies have quit covering the state's Gulf Coast. And smaller firms are going out of business after Louisiana endured two major hurricane strikes in the last two years. As NPR's Debbie Elliott reports, the insurance shake-up comes amid a slow-going disaster recovery.

DEBBIE ELLIOTT, BYLINE: In Houma, La., the scars from last year's Hurricane Ida seem fresh. A strip mall grocery store is abandoned, its glass front knocked out. Signposts and gas station awnings are ripped away. And faded blue tarps cover buildings.

JONATHAN FORET: The downtown area really took a beating.

ELLIOTT: Jonathan Foret runs the South Louisiana Wetlands Discovery Center in Houma, a town of about 30,000 southwest of New Orleans. On a drive to meet with his insurance agent, he reflects on how the destruction has lingered.

FORET: I thought that it would become easier, but it's actually had more of a compounding effect of driving by those things and seeing them broken and destroyed every day. It's become more depressing than I thought it would be, you know?

ELLIOTT: His own home is still in need of repairs. A tarp is over his kitchen roof, awaiting a contractor. Now, in the midst of hurricane season, he's facing a new complication after his property insurance company went under.

TRACEE BENNETT: Hey.

FORET: Hey.

ELLIOTT: His agent is Tracee Bennett at La-Terre Insurance Agency.

FORET: All right. So this came in the mail. I just want to make sure that all of these were paid up.

BENNETT: One of them is special.

FORET: Right.

BENNETT: So these are like the new Citizens policies. So these are the ones...

ELLIOTT: Citizens is the state-run Louisiana Citizens Property Insurance Corporation.

BENNETT: Right now, we still have people with damage from Ida. So if you have an open claim or damage that you're still repairing, Citizens is the only option that we have.

ELLIOTT: Her office has been scrambling to help hundreds of clients, like Foret, who have either had their insurance companies go bankrupt or not renew policies on the coast.

BENNETT: I've been in insurance since I can remember. And this is truly the low point of where I've seen it.

JIM DONELON: It's a crisis.

ELLIOTT: Louisiana Insurance Commissioner Jim Donelon.

DONELON: Probably a little less than Katrina and Rita, but very close.

ELLIOTT: After those devastating storms in 2005, most major national firms quit offering wind insurance in south Louisiana. The state turned to some 30 regional firms to fill the gap. But after $22 billion in losses from Category 4 hurricanes Laura in 2020 and Ida last year, it was just too much for some companies to handle.

DONELON: Unfortunately, a half-dozen of those have now gone into receivership.

ELLIOTT: Donelon is among the 140,000 Louisiana homeowners affected. He says about half of those policies were taken over by other firms. But the burden is falling to Citizens, the state-run insurer of last resort.

DONELON: They're absorbing it, but it ain't pretty, as we speak, because they are being inundated.

ELLIOTT: He predicts Citizens will have tripled its number of policies by the end of the year. And those government policies are more expensive than private insurers, whose rates have also increased. Adding to the pain, flood premiums are also going up. Insurance agent Tracee Bennett.

BENNETT: I can tell you, down here, it has been crippling. Between that and this, this is hurting.

ELLIOTT: Houma, La., is a mostly working-class town in Terrebonne Parish, a region threaded with bayous that lead to the Gulf of Mexico on its south end. People work in the oil and gas industry, at ports and in seafood. The median household income in Houma is about $45,000. Jonathan Foret says that doesn't leave a lot of wiggle room to cope with the higher insurance costs, layered with inflation, the hurricane recovery and the ongoing threat from climate change.

FORET: We're in it. Like, we're in it in a way that is going to prevent people from being able to live along the coast.

ELLIOTT: You can see it in south Terrebonne, where schools and fire stations remain out of commission. Dozens of homes are abandoned and look just like they did a week after Ida struck, roofs torn off and furniture scattered in the wreckage. Alex Kolker, a professor at the Louisiana University Marine Consortium in Cocodrie, says the higher costs of cleanup, rebuilding and now insuring could transform these towns.

ALEX KOLKER: I think it makes these areas much harder to live in and harder to have the kind of community where people would want to live. So I think that you look at, you know, the possibility of climate migration and people moving elsewhere.

ELLIOTT: Kolker says what's happening here should be a wake-up call.

KOLKER: The real issue is, it's not just a few isolated people in rural Terrebonne Parish. It's that this could be happening to so many people around the country in the not-too-distant future.

ELLIOTT: Fannie Celestine's (ph) experience after Hurricane Ida shows how people get displaced from their communities in a disaster. Her public housing apartment in Houma was condemned after Ida. She's 59 and lost just about all of her belongings.

FANNIE CELESTINE: It's kind of hard to talk about it without crying.

ELLIOTT: Because of a housing shortage near the coast, Celestine lived for months in a hotel a hundred miles away in Lafayette before moving into this FEMA trailer closer to home. It's on an isolated gravel field away from town with no public transportation.

CELESTINE: It's a place to stay. But I'm from Houma. And I would like to go back to where I'm from. Transportation, I don't. have that.

ELLIOTT: She's tired of depending on relatives to get her to the doctor or shopping and longs to get back to ordinary living, so does Jonathan Foret. And he spots a literal sign of normalcy on the back of a tractor trailer rig.

FORET: Look; it's a Mc'Donald's sign. What? I mean, we can't get insurance. But, look; they're replacing the Mc'Donald's arches, golden arches (laughter).

ELLIOTT: After nearly a year of seeing a hurricane-mangled golden arches on the corner, this repair gives him a glimmer of hope that things will get better.

Debbie Elliott, NPR News, Houma, La.

(SOUNDBITE OF OATMELLO AND LATE ERA'S "GOOD NIGHT") Transcript provided by NPR, Copyright NPR.

NPR National Correspondent Debbie Elliott can be heard telling stories from her native South. She covers the latest news and politics, and is attuned to the region's rich culture and history.