Lambert speaks to Gonzales Rotarians of insurance industry ‘crisis’

Wade McIntyre
State Rep. Eddie Lambert of Gonzales was guest speaker at the recent Rotary Club of Gonzales meeting where he spoke about the insurance crisis in Louisiana. He was greeted by Rotarian Glynn LeBlanc and Club President Mark LaCour.

Louisianans are suffering from a “real crisis” in the state insurance industry after massive damage claims from Hurricanes Katrina and Rita, which were followed by more damages and claims from Hurricanes Gustav and Ike two years later, state Rep. Eddie Lambert of Gonzales said.

“Without insurance, we can’t have economic growth,” said Lambert, who spoke at a recent Rotary Club of Gonzales meeting.

The state economy suffers when banks stop lending money to businesses and homeowners who are uninsured and live or operate in harm’s way areas, the Republican representative said.

Storm zone deductible insurance policies sold to residents and businesses located below Interstate 10 and certain areas below Interstate 12 have high deductibles based on the likelihood of a storm or hurricane occurring.

But Lambert said if the state were to tell insurance companies the deductibles are too high, insurance companies might pull out of Louisiana.

“What good would that do?” he said.

He suggested that a tax credit for residents and businesses affected by the storm and high deductibles might be a possibility. The credit would be affected by reductions enacted by the last legislature, and reductions in state revenue due to the declining price of oil per barrel.

“A $1 per barrel deviation in the price of oil equates to $12 million in state revenue,” Lambert said.

A $240 million state deficit at the end of this fiscal year is possible, he said, and that would make it impossible for the state to help homeowners and businesses cover their high insurance deductibles.

Lambert said the key to reducing high deductibles lies in creating a competitive environment for insurance companies in Louisiana.

Companies with too many policies in Louisiana want to get out due to the hurricanes, but others who mostly got out of the state before the storms now want to get back in, he said.