Florida And Louisiana State-Owned Insurers Must Borrow Millions To Pay Claims

The Gulf Coast insurance crisis has hit a new low as two state-chartered insurance associations are being forced to borrow hundreds of millions of dollars for the first time in three decades to pay the hurricane claims of insolvent insurers.

Borrowing in Florida and Louisiana could reach a combined $1.35 billion and will be repaid largely by insurance policyholders across each state through premium increases or surcharges that will last for years.

The emergency financial maneuver is the latest illustration of the collapsing property insurance market along the Gulf Coast following a series of destructive storms and a torrent of lawsuits.

More than a dozen insurers have become insolvent, leading to soaring premiums and the cancellation of hundreds of thousands of homeowners’ policies.