“As we get further away and hopefully go unscathed through this hurricane season, more of those companies will return to the market, I am certain, as it happened 15 years ago after Katrina and Rita,” the commissioner said.
Donelon also noted that since the cancelations of the three insurers, the number of policies with the state insurer of last resort, Louisiana Citizens, jumped from 35,000 to 82,000. The commissioner is anticipating that number to climb even further to 95,000.
WVUE-TV reported that Southern Fidelity joins two other insurance companies – Lighthouse Excalibur and Maison – which have also recently dropped homeowners’ insurance policies in Louisiana. Together, the three have canceled a total of nearly 100,000 policies since June.
As reported by The Associated Press, Southern Fidelity customers have until September 13 to find a new insurance policy. Meanwhile, Lighthouse Excalibur and Maison’s former clients have until August 28 to secure coverage.
The state of Southern Fidelity is such that ratings firm Demotech withdrew its Financial Stability Rating for the company, noting that Southern Fidelity failed to secure reinsurance coverage in time for the upcoming hurricane season. And Louisiana is not the only state where Southern Fidelity is taking a hit.
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The financially strapped company was previously ordered by the Florida Office of Insurance Regulation (OIR) to transfer some or all its policies to another insurer as part of a “winding-down” plan.