One state’s plan to retain climate-anxious insurers

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May 02, 2024 View in browser   By Arianna Skibell Presented by  Yvonne Lacobon hugs a dog beside Tommy Williams at Williams' home in Dulac, Louisiana. The property was damaged in 2021 by Hurricane Ida. | John Locher/AP Property insurers are fleeing climate-vulnerable areas around the country to avoid massive payouts. In Louisiana, lawmakers have a plan to lure them back. The GOP-controlled state Legislature passed a bill this week that would make it easier for insurers — many recently bankrupted by four major hurricanes — to drop their riskiest properties, write Adam Aton and Thomas Frank. The move would repeal a law, instituted after Hurricane Katrina, that prevented insurers from dropping policies that had been renewed for three years or from raising the deductibles of those policies. The Louisiana bill is just the latest gyration in the havoc that climate-fueled disasters are wreaking from Florida to Texas to California, and beyond. Under the Louisiana legislation — which Republican Gov. Jeff Landry is expected to sign — insurance companies could drop 5 percent of their policies, or more with the state’s permission, as long as they aren’t concentrated in a single parish. “We are in a crisis,” said state Rep. Chad Brown, the Republican vice chair of the House Insurance Committee and a supporter of the bill. Insurance companies need more flexibility if they’re going to stay in the state, he said, even though that “may not be popular with some people.” Critics of the bill said it could simply shift the liability of risky properties from private companies onto the state’s program. People who cannot find private policies are forced to buy property coverage from a state-chartered insurer — often at a premium of 10 percent or more. State Rep. Matthew Willard, a Democrat from New Orleans who opposed the measure, said his constituents would bear the brunt of the changes. “People are losing generational homes — where they grew up in, their parents grew up, maybe even their grandparents grew up — because they can’t afford” insurance, he said. While the measure garnered some Democratic support, it passed on a largely party-line vote. In the short term, some people may pay more for insurance, proponents admitted. But they argued that was necessary to keep insurers in the state — ensuring more competition and lower rates over time. Any way you slice it, insuring properties in vulnerable areas is increasingly expensive. Policymakers around the country continue to grapple with who foots the bill.   It's Thursday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from NRECA: American families and businesses expect the lights to stay on at a cost they can afford. Unfortunately, the path outlined by the EPA last week undermines electric reliability and poses grave consequences for an already stressed electric grid. The American economy can’t succeed without reliable electricity. That’s why electric co-ops are fighting for smart energy policies that prioritize reliability and affordability for all. Learn more.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: James Bikales breaks down why the Biden administration's forthcoming electric vehicle tax credit rule has a China problem.   A message from NRECA:   Power Centers The FTC says the head of Pioneer Resources worked to coordinate U.S. crude oil production with OPEC. | Frederic J. Brown, AFP via Getty Images Price-fixing allegations in Texas oil country The Federal Trade Commission has accused the former head of a Texas oil company of seeking to collude with his OPEC competitors to sync U.S. oil production and inflate energy prices, writes Ben Lefebvre. Scott Sheffield founded Pioneer Natural Resources, a company ExxonMobil has been seeking permission to acquire. Due to the former CEO’s alleged efforts to coordinate oil output with the cartel, the FTC has barred him from taking a seat on the combined company’s board of directors. Manchin's at it again During a Senate hearing Thursday, Democratic Sen. 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Supply scramble: South Carolina utilities are pushing for more gas and a "blank check," amid a specter of past scandal. Subscriber Zone A showcase of some of our best subscriber content. Supervisory biologist Mary Larson, right, and fish habitat specialist Chris Lima stand by a series of manmade but natural-appearing fish ladder on Gobernador Creek in Gobernador Canyon in Carpinteria, California on March 19, 2010. | Reed Saxon/AP California is having a really good water year. But all the rain and snow are doing almost nothing to lubricate the state’s perpetual conflicts between fish and farms. The board members of a new fund that will help countries recover from climate change disasters had a lot to cover in their first meeting this week. One thing they aren't ready to tackle: what to call it. Microsoft has signed a record low-carbon electricity deal in an effort to meet growing demand for data centers that are poised to strain the grid. That's it for today, folks! 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We must have a serious conversation in this country about where we’re going and what it will take to realistically get there. The stakes are too high to get this wrong. As electricity demand grows and supply fails to keep up, bad public policy is making the problem worse. The barrage of new EPA rules ignores our nation’s ongoing electric reliability challenges and is the wrong approach at a critical time for our nation’s energy future. That’s why America’s electric co-ops are fighting for smarter energy policies that prioritize reliability and affordability for all.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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