Louisiana’s insurers are on the hook for $100 million in Hurricane Ida claims left unpaid by two now-defunct carriers in the state.
In an Associated Press report, citing The Advocate, it’s noted that both Access Home Insurance and State National Fire Insurance shut down in the wake of the costly storm.
Access Home are stated to have received claims totalling roughly $180 million, with just $115 million in reinsurance and cash available.
State National logged more than $70 million in claims with only $41 million on-hand.
The two companies are said to have provided claims to around 28,000 homeowners.
The majority of these will be shouldered by The Louisiana Insurance Guaranty Association, essentially a state-sponsored safety net for policyholders.
For the first time since 2004, its board opted to charge insurers 1% of their net written premiums, in an effort to bolster funds and cover the 8,000 which have already been filed.
“Our whole goal is to pay the people as timely and effectively as possible, but we’re in a bit of a transition period,” said John Wells, LIGA’s executive director. “We’re talking days and weeks, not months and years, to get people paid.”
It’s reported that the fund will use the $100 million to fill the gap between what’s owed to policyholders and what the insurers have on-hand.
However, LIGA could turn to insurers next year for an additional 1%, if the capital is required.
Hurricane Ida made landfall as a Category 4 storm near Port Fourchon, Louisiana, about 60 miles south of New Orleans, with a maximum sustained wind speed of 150 mph.
The remnants of the storm went on to impact the North-easterly states of the US and caused flooding damage and disruption across the region.
Currently, industry loss estimates for Hurricane Ida range from $30 billion to as high as $41 billion, and includes impacts in the Gulf region, the Northeast, and also losses to the NFIP.
