Shared Fates: Rising Insurance Costs in Louisiana
Key Takeaways
Between 2021 and 2024, the cost of a standard private home insurance policy increased more than 40 percent across Louisiana, from $3,800 to $5,400.
Three out of every five households in Louisiana need to spend more than 10 percent of their income on a standard private home insurance policy. That means a household making $50,000 needs to pay more than $5,000 annually for home insurance.
To understand how the home insurance crisis is affecting households across the state, we compared price quotes for a hypothetical private insurance policy that we standardized in every way except for the zip code (see the full memo appendix for details). Our analysis reveals the immensely high and burdensome cost of home insurance and how rapidly private market insurance costs have increased in recent years. Instead, we propose the creation of Housing Resilience Agencies, to bring down the costs of insurance and protect people during increasing disasters.
This year marks 20 years since Hurricane Katrina, and the number of billion dollar disasters hitting Louisiana has only increased in the last two decades. Insurance companies have responded by jacking up premium prices, even as they shrink protections or stop offering any policies at all.
This memo builds upon analysis in our report, Shared Fates: A Housing Resilience Policy Vision for the Home Insurance Crisis, which found that almost 40% of people in the US live in areas with high risk of property damage. Today’s insurance crisis is a housing justice issue impacting people across social lines. To fix our broken insurance system, we propose the creation of state Housing Resilience Agencies, an equitable solution to our escalating home insurance crises.
