Insurance firm to cancel all commerical policies in NOLA
Scout Prime of First Draft has some very bad news about New Orleans:
The carrier's sudden decision not to renew any polices for businesses in Orleans, Jefferson, Plaquemines, St. Bernard or eastern St. Tammany parishes. Some firms in other parts of South Louisiana, including St. Charles and St. John the Baptist parishes, may also have a harder time getting insurance with St. Paul Travelers.
St. Paul Travelers Cos. Inc., Louisiana's largest commercial insurance provider, plans to cancel all its commercial property policies in the New Orleans area next year, sparking fears that other insurers will follow and slow the region's economic recovery.
The company claims that it is pulling out because of the sorry state of the levees of New Orleans. (Not an implausible rationale, given the state of the levees.) However, cynics note that the pullout follows on the heels of a court decision giving flood insurance policy owners the right to seek flood-related damages through other kinds of policies. The company insists that the pullout has nothing to do with the recent legal clarification of policy-holders' rights.
Analysts worry that other insurance companies will follow St. Paul's lead and pull out of New Orleans.
This is a very serious situation. If businesses can't get insurance, many will close, or never reopen. If businesses close, New Orleans will lose jobs, goods and services, and tax revenues.
A commercial insurance coverage crisis could doom the reconstruction effort in New Orleans.