Author Argues Louisiana Insurers and FEMA Leave Policyholders Stranded

In a column, the author argues that Louisiana property owners face a broken insurance market where insolvent companies leave policyholders stranded while executives retain millions in payouts.

The essay details the author’s personal five-year experience living in a FEMA trailer following hurricane damage. Premiums were paid, yet the insurer delayed claims through endless adjuster changes before eventually going bankrupt.

About a dozen homeowners insurers collapsed in Louisiana after the 2020 and 2021 hurricanes, leaving roughly 185,000 policies stranded. Among them was FedNat, whose CEO collected nearly $10 million over five years. The executive resigned two months before insolvency was declared, securing a $1.2 million payout.

“Somebody made money. It wasn’t the families who were owed,” the author writes.

State safety nets fall short of honoring original policy contracts. When FedNat failed, claims moved to the Louisiana Insurance Guaranty Association, known as LIGA. The fund operates under statutory caps and excludes bad-faith penalties or attorney fees.

Policyholders must fight the state’s guaranty fund in federal court just to secure partial contract fulfillment. LIGA assessments land on solvent insurers, who recoup costs through state tax credits, shifting the ultimate financial burden onto taxpayers and remaining policyholders.

Federal flood insurance compounds the financial strain. Rates climb by 18% annually despite billions invested in local flood protection infrastructure. In 2022, Letlow signed a letter asking FEMA whether the upgraded New Orleans levee system factors into its pricing formula. The agency never provided a direct answer, leaving regional families to shoulder rising costs.

The column asks why these questions have never been asked under oath regarding executive payouts and corporate insolvencies. Survivors continue organizing to demand accountability from both private insurers and federal disaster programs.