Resiliency measures may combat Louisiana’s insurance crisis
Louisiana home insurance rates have rapidly increased in recent years as destructive weather events become more frequent and severe.
Insurers have reported $1.6 billion in underwriting losses in Louisiana over the past decade. The active 2020 and 2021 hurricane seasons, combined with rising repair costs due to supply chain issues, tipped the state into an insurance crisis.
A dozen insurance companies became insolvent after Hurricanes Laura and Ida, and remaining insurers rapidly raised rates. The average cost of home insurance in Louisiana surged by 38% in 2024, surpassing $10,000 per year for a $300,000 single-family home, according to Insurify data.
Insurify’s data science team projects home insurance premiums will rise by an additional 27% in 2025.
Resiliency programs, like the proposed fortified roof tax credit, could help stabilize insurance rates by reducing weather-related damage and insured losses.
“[Fortified roofs] protect the home much better, should there be high winds,” said Buddy Parkhurst, licensed insurance agent at Insurify. “The fortifications help prevent major damage, therefore reducing the amount of claims and the cost of repairs.”
Installing a fortified roof reduces water intrusion from destructive storms by up to 95%, according to the Insurance Institute for Business & Home Safety (IBHS), a building safety research nonprofit. The Fortify Homes audit found that Louisiana homeowners save an average of 22% on their premiums by upgrading to a fortified roof.
“At the end of 2022, there were just over 300 [IBHS] Fortified-designated homes in the state. Yet, thanks in large part to the actions of the Louisiana Department of Insurance, the number of designations may reach 10,000 by the end of the year,” said Michael Newman, general counsel for the IBHS. “Additional incentives will only further encourage homeowners to take action, bolstering Louisiana’s ability to withstand future hurricanes.”
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