Bayou Towers still without property insurance

The situation The Houma Terrebonne Housing Authority’s Bayou Towers could get interesting as hurricane season approaches. Still without property coverage, insuring against wind and hail damage any tropical storm could permanently close the building, officials fear.

Executive Director Wayne Thibodaux reported to the housing authority board last week that no progress had been made in finding a company that would offer a policy to cover at least 80 percent of the $16 million structure.

The eight-month-old search for insurance will continue, Thibodaux said at the monthly board meeting on Jan. 23.

Numerous inquiries have been made across the country but because of the value of the structure and its location, companies are hesitant to commit, said Robert Page, of Page & Sons Insurance Agency. His company is assisting Thibodaux with the search for an insurer.

Page said post-Katrina, it has been difficult to find companies who will insure the Terrebonne area or any properties south of I-10. “It’s been hard trying to find a company that will insure a building of that value as well,” said Page.

Two companies have taken a serious look, the most promising being Louisiana Citizens, but it can only cover a maximum of $2 million, far from the mandatory 80 percent coverage needed.

The second perspective company, Indian Harbor, a London-based firm, withdrew its bid because of both the value and the risk, Thibodaux said.

Since companies are more likely not to cover the full 80 percent, Page said he is considering coverage through a handful of insurers. The main roadblock to such an approach could ultimately be with Bayou Towers’ last hope n its contract with Louisiana Citizens.

To be eligible for Citizens’ $2 million, legal verbiage doesn’t allow for the excess value of the building to be covered by other groups.

“This is not just a problem in Louisiana, it’s become a nation-wide trend. If you look at the Carolinas, Georgia and Florida, you’re seeing the same issues with insurance,” said Page.

According to Page, insurance companies have found themselves in a jam time and time again because of the political realm.

“I think people, including legislators, commonly view insurance companies as social political functions when really they are private industry function. They can put a number to anything and draw a premium,” he said.

But for years, government has been changing the game. Legislatures can make dramatic changes to the industry, and companies are having to pay out of pocket for unforeseen costs and loosing millions because of it, Page explained.

Page said insurance companies “just don’t want to play the game anymore.”

“It’s like if I ordered pencils from you but changed my mind and wanted pens instead. You would have no choice but to fill the request because of government regulations, and you as the seller, would absorb the cost you didn’t intend to sell,” he said.

When it comes to insurance, Page said that every word in legislative insurance regulations is a result of some litigation, some lawsuit.

That means the insurance industry can take a dramatic turn in just 12 months, he noted.

Page said he will continue searching for multiple insurers for Bayou Towers, but signing a policy may still be a ways off.