‘You are responsible’: One Louisianan’s experience after his homeowners’ insurer collapsed – NOLA.com

Dry Wall Contractor

Louisianans know what it looks like when a homeowner is at the mercy of their insurance company: the blue-topped roofs, the drywall mounded on the curb.

But when an insurer goes out of business, the reckoning is more likely to turn up in the mailbox, as frustrated and unpaid vendors try to collect from the last person left.

Eugene Brandt of St. Bernard Parish learned this the hard way.

Over the last two months, Brandt has watched as every benefit approved by Lighthouse Excalibur Co. turned into a liability following the company’s collapse earlier this year.

He now pays for a three-bedroom rental in Violet. The leased furniture has been repossessed. An outstanding bill for $34,000 led a mold remediation company to put a lien on his house. And another company that was hired to move, clean and store his family’s belongings are holding it all hostage until they receive a $50,000 payment.

Brandt is now caught up in the state’s cascading homeowners’ insurance crisis — a world where companies regularly fail, payments are often slow and people’s lives get put on hold while it’s all sorted out.

Seven insurers were declared insolvent in the last year, folding under financial strain in the wake of four punishing hurricanes over two years. Collectively, they left behind some 26,000 claims. Those are now in the hands of the Louisiana Insurance Guaranty Association, which inherits claims that defunct companies can’t pay.

Among the biggest failures were those of Lighthouse, which had 22,000 Louisiana customers, and Southern Fidelity Insurance Co., whose 42,000 customers in the state lost coverage this week, a month after the company was ordered into liquidation.

The broad fallout has also left the state with a hefty bill. LIGA will borrow $600 million by issuing bonds to pay off the losses from the failed companies and replenish its reserves. It’s the first time in three decades that LIGA has had to take such a step.

Consumers are struggling to make sense of it all.

“I’ve been waiting, thinking ‘oh, they’re going to find somebody to take it (the insurance claim) over,’ ” Brandt said in early June. “But in the meantime, what are we supposed to do?”

LIGA is working through a backlog of nearly 10,000 claims and expects to receive thousands more from Southern Fidelity’s recent failure. Although the association has hired at least eight adjusting firms, long waits remain a feature of the claims process.

For homeowners like Brandt, the holdup comes with a cost. He is worried the delays will keep eating into his finances, now that he’s paying rent in addition to his mortgage. And he doesn’t want to lose the house that his parents worked for years to buy.

“I can’t do that because I only owe $20,000 on it,” he said.

‘You are …….

Source: https://www.nola.com/news/article_315295be-0a1b-11ed-bec5-5b8861076d44.html

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