in Louisiana, since Katrina, we have had a law that says that if you had your mortgage insurance at least three years, you could not be canceled saved for valid reasons like fraud or three claims in five years. The second alternative means that three legitimate storms, causing damage enough to make a claim in five years allows them to cancel you through no fault of your own. But the three and five year rule protects the insurance company.
Enter the new business, friendly administration with the governor and insurance commissioner in the same party, and this year they changed the law and allowed insurance companies to back out of 10% of their policies per year for no reason. Even better, they’ve now made it illegal to do discovery or inquire the reasons behind the decision to cancel 10% of the policies. It is now deemed essential that cannot be discovered legally. So now they can simply decide to cancel policies because you’re black because you’re gay because they don’t like that you live next to the coast, or because the previous owner made too many claims and you will never find out the true reason why, even if the reason would otherwise be illegal.
The claimed reason for passing this law is to give an incentive for more insurance companies to come to Louisiana. Our insurance commissioner until recently was a lobbyist for the insurance agency. This is not going to work out well for Louisiana and we are well on our way to massive numbers of people in our state being uninsured or having to pay $12k to $20k a year for insurance.
At some point, we are going to need some sort of national mortgage insurance similar to the FEMA flood policy,that will require slightly higher premiums in the parts of the country that do not suffer the immediate climate change threats to help subsidize the rest of the country. The problem is it looks like the rest is in increasing danger as well, with everybody facing new unforeseen flood dangers, and seemingly 100 a year storm in a new area every year