Donelon: La. economic growth comes from Katrina ‘stimulus’

Louisiana’s recent economic growth is a result of the billions of dollars insurance companies and federal agencies have given to help with the rebuilding after Hurricane Katrina, says Jim Donelon, insurance commissioner. Donelon, speaking today at the Rotary Club of Baton Rouge, says insurance companies paid out $25 billion for the damages caused by the hurricane. Hurricane Rita also led to an additional $3.3 billion in payments. That figure doesn’t include the $15 billion the National Flood Insurance Program paid out as a result of Katrina and Rita. Donelon says that stimulus Louisiana received caused the state to jump up to 26th place in a list of how all states ranked in per capita income. Before that, Louisiana was always in the low 40s. “And for the first time, the past three years in a row, we’ve seen more people moving into Louisiana than there were people moving out,” he says. It’s not only residents that have been moving in since Katrina. Donelon says there are now a dozen more insurance companies writing homeowners policies in the state than there were in August 2006. This increased competition has helped consumers: Donelon says he went from paying $11,300 a year for insurance on his Metairie home with a 3% named storm deductible to paying $4,800 a year with a 2% named storm deductible. The competition has caused Louisiana Citizens, the state’s insurer of last resort, to see its share of the market drop from 7% before Katrina to 6% as of the end of 2010. —Timothy Boone