Louisiana Homeowners Are Now Paying $6,274 a Year. That's Nearly Triple the National Average.

Louisiana Homeowners Are Now Paying $6,274 a Year. That's Nearly Triple the National Average.

Nancy Reed isn't an outlier anymore — she's becoming the rule. A retired nurse in San Diego, she's been dropped by her longtime carrier, forced onto California's FAIR Plan, and now hunting for supplemental coverage that insurers keep yanking away before renewal. But if you think California's problem is uniquely bad, Louisiana just raised its hand: homeowners there are now paying an average of $6,274 annually for basic home insurance. That's not a typo. That's $2,000 more than the national average of roughly $2,000, and it reflects what happens when an entire state becomes too risky for private insurers to touch.

The five costliest states — Nebraska, Louisiana, Florida, Oklahoma, and Kansas — have all crossed the $4,400 threshold. Between 2017 and 2024, inflation-adjusted premiums rose 28% nationally. But in these states, the math is uglier. Deductibles climbed 22% in 2025 alone. This isn't premium creep. This is a market in structural failure, and Louisiana is the canary.

What makes Louisiana's numbers especially grim: it's not just one catastrophe driving the spike. It's the reinsurance market's collective verdict that coastal and Gulf-adjacent states are now too expensive to insure at any price that customers can actually pay. When reinsurers — the companies that insurers buy protection from — decide a region is uninvestable, primary insurers have only two moves: raise premiums to astronomical levels or exit the state entirely. Louisiana is getting both.

Gobble's Take: If you live in Louisiana, Florida, or coastal Texas, your insurance bill isn't a bug in the system — it's the system working exactly as designed to price you out.

Source: Google News

California Courts Block Expanded FAIR Plan Coverage

California's Insurance Commissioner Ricardo Lara tried to force the state's insurer of last resort to offer liability and water-damage coverage — the stuff that makes a home insurance policy actually useful. A Department of Insurance regulation would have required it. The California FAIR Plan would have had to step up. Then a state appeals court blocked the entire thing.

The court's reasoning: the FAIR Plan was designed in 1968 to be a bare-bones safety net for people who can't get insurance anywhere else. Liability coverage wasn't part of the original legislative intent. So even though homeowners on the FAIR Plan must hunt for supplemental "difference-in-conditions" policies in a market widely considered dysfunctional, the court said that's not the FAIR Plan's problem to solve. Lara said he is "looking at all available options" following the decision.

The gap is real and growing. The FAIR Plan had about 160,000 active dwelling policies following a series of catastrophic wildfires — by September that number had grown to 646,000. Broker Dina Smith says she places roughly 90% of her wrap-around clients with carriers not regulated by the state, with combined coverage typically costing at least twice a regular policy. Retired nurse Nancy Reed, 71, is paying about $2,000 for 12 months of supplemental coverage and has already been dropped by two carriers. "I'm holding my breath to see if I will be renewed next year," she said.

Gobble's Take: The court protected the FAIR Plan's legal definition — it didn't protect the 646,000 homeowners stuck shopping a market that keeps dropping them.

Source: Los Angeles Times

Three Economists Just Proposed a Federal Rescue. Here's Why It Might Actually Work.

The private reinsurance market has a breaking point. We're hitting it. Inflation-adjusted premiums rose 28% nationally between 2017 and 2024. Insurers are exiting states. FAIR Plans are drowning in exposure. And now three economists from Wisconsin and Wharton are proposing something radical: a new federal entity called "US Re" that would sell reinsurance to homeowners' insurers — not to homeowners directly, but to the companies that insure homes.

The idea is deliberately narrow. It doesn't try to replace the private market or turn the government into an insurance company. Instead, it targets the reinsurance layer — the protection that insurers buy when they face catastrophic losses. The key mechanism is the federal government's cost of capital. Because the US Treasury can borrow at rates unavailable to private market participants, US Re could price catastrophic reinsurance at lower and more stable rates than private reinsurers can offer. The authors are careful to call this a structural fix, not a subsidy.

Why this matters: reinsurance is where the real bottleneck is. California's FAIR Plan received nearly 4,800 claims from the January 2025 Los Angeles wildfires — events that produced estimated total losses that could exceed $250 billion — and needed a $1 billion assessment on private insurers just to stay solvent. Florida, Louisiana, and Texas aren't far behind. The proposal comes from the Brookings Institution's Hamilton Project and is explicitly designed to avoid the failures of past government insurance experiments, including the debt-laden National Flood Insurance Program.

Gobble's Take: This won't fix your premium tomorrow — but it's the first serious proposal that might actually address why premiums broke in the first place.

Source: Insurance Business Magazine

In Case You Missed It

Yesterday's top stories:

• SpaceX's Rocket Tests Are Cracking Walls in South Texas — and 80 Homeowners Want to Know Who Pays
• State Farm Left. Then Allstate. Then Eight More. Here's the Map of Where Private Insurance Is Vanishing.
• California's FAIR Plan Was a Trickle Valve. Now It's Holding Back a Dam.