Louisiana legislators need to quit wasting time trying to figure out how to eliminate the state’s income tax and expend all of their efforts coming up with a solution for the insurance crisis facing this state.

Nine property insurance companies with policies in Louisiana have become insolvent since the state was battered with hurricanes beginning in 2020. Others have pulled out, leaving millions in claims unpaid. And that is only half the story. The cost of flood insurance is climbing out of sight.

Louisiana Citizens Property Insurance Corp., the state- backed insurance company, is one gauge in determining exactly how bad the property insurance situation has become.

The company after hurricanes Katrina and Rita hit the state in 2005 had some 170,000 policyholders. Louisiana Citizens had to borrow $1 billion to pay damage claims and every homeowner in the state is having to pay regular assessments on their insurance policies to pay that money back. It continues until 2026.

Meanwhile, every year since 2008, private insurance companies attracted to the state with an incentive program began taking over Louisiana Citizens policies. By 2021, the state-backed company had only about 36,000 policyholders, according to The Advocate, which has investigated the current property and flood insurance situation in detail.

Now, after four powerful hurricanes in 2020 and 2021, Citizens  has more than 100,000 policyholders. Those policyholders are already having to pay premiums that are 10 percent higher than private companies, and Citizens wants a 63 percent rate hike. That definitely creates an insurance crisis.

Insurance Commissioner Jim Donelon wants to offer another incentive plan to get new companies to offer property insurance in Louisiana like the state did after Katrina and Rita. State Rep. Mike Huval, R-Breaux Bridge, and chairman of the House Insurance Committee, called the incentive plan “a good tool,” adding, “I’m not going to say it’s going to fix everything.”

Observers of the insurance industry are skeptical the incentive plan is the right way to go. A professor of insurance at Temple University said Florida, like Louisiana, provided subsidies to companies for taking on insurance policies.

“Florida provided bounties, so if you took policies, you got a bounty,” the professor said. “When the sun was shining, people collected the bounty, but they just didn’t have enough capital  when it rained. And they went bankrupt. What we’re doing is just postponing the problem.”

Louisiana had the same problem. Jim Brown, a columnist and former state insurance commissioner, said a better plan is for Gov. John Bel Edwards to get an agreement from states along the coast to create a new multi-state insurance pool that would add a new assessment on every property insurance policy sold. The money would go into a multi-state rainy-day fund for use when a major hurricane hits.

What the Legislature’s insurance committees should be doing before next April’s session is coming up with a similar plan or something better than Donelon’s incentive plan that didn’t work.

Then, there is the National Flood Insurance Program run by FEMA. It has a new rate plan that means Louisiana homeowners will eventually see 122 percent average premium increases over a number of years.

Matthew Jewell, president of St. Charles Parish, told The Times Picayune/The Advocate, if FEMA’s new rate continues as it exists, “it will destroy the housing market in southeast Louisiana, and that will domino onto the greater economy in southeast Louisiana, because people will simply not be able to afford to live here.”

Louisiana’s congressional delegation is trying to get FEMA to rethink its new rate plan but has so far been unsuccessful.

Anyone who doesn’t think Louisiana has a property and flood insurance crisis is simply ignoring the facts. More than 425,000 people in this country have discontinued their flood coverage because the rates are too high, according to ClimateWire.

Louisiana has the highest percentage of flood-insured homes in the country, 25 percent or a half-million policyholders. In hard-hit Florida, only 18 percent had coverage. The average cost of flood insurance in Louisiana is $726 per year, but many homeowners are paying much more.

It’s easy to see why the state’s insurance problems deserve immediate attention from legislators. The sponsor of the effort to do away with state income taxes wants to raise state sales and property taxes, do away with the industrial tax exemption, and lower local sales taxes.

Any one of those three is a deal-killer, and none are likely to happen. However, higher property and flood insurance rates are already here and need some quick solutions.