Four years after Hurricane Katrina decimated coastal Louisiana, repercussions are still rippling through the insurance industry. One of them is a policy change from Allstate. The insurer has announced that it will stop paying emergency living expenses for roughly 16,000 policyholders who own homes in coastal Louisiana.
If this sounds harsh, it’s not. The 16,000 homeowners affected – about 10% of all of Allstate’s customers in Louisiana – all have wind and hail coverage through another carrier, and Allstate spokeswoman Allison Hatcher says the living expense coverage will simply shift to that carrier. Hatcher added that those customers who have wind and hail coverage with Allstate will not see rate increases as a result of the change.
A significant portion of the affected homeowners have their wind and hail coverage through Louisiana Citizens Property Insurance Corp, which began offering such coverage after other insurance companies began dropping coastal customers after Katrina.
John Wortman, CEO of Citizens, explained that his company limits additional living expenses to 10% of the total policy, so on a policy that provides $200,000 of homeowners insurance coverage, there would be $20,000 of emergency living expenses.