Louisiana's better bet

Washington Post: Louisiana has an insurance problem. Ever since the devastation of Hurricane Katrina, the industry has dropped customers, raised premiums and threatened to leave the state. Given Florida's extensive hurricane experience, it's only natural that Democratic Gov. Kathleen Babineaux Blanco would look there for ideas. But after careful examination, Blanco told us, "We're not going to mimic Florida. They have taken on an extraordinary amount of risk." Louisianans should breathe a sigh of relief.
What Florida did was bet against Mother Nature with a plan that is neither fiscally sane nor environmentally smart. The state-run insurance company expanded its portfolio of policies to include fire and theft -- the better to spread the risk. And the threshold for troubled insurers to get at the state's catastrophe fund was lowered while the upper limit on the state's liability after a major storm was doubled. This makes it attractive for people to call their very own dangerous piece of hurricane alley home -- much to the delight of developers. Never mind that Florida has nowhere near enough money to cover all the promises made to insurers and taxpayers. If the big one hits, they're out of luck.
Different path
Blanco wants to follow a different path. Rather than add to Louisiana's state-run insurance program, she'd like to find a way to get the private market to take on those policies. And she would like to create tax incentives for homeowners to protect their residences against wind damage. This and other ideas being considered by the governor will be debated when the Louisiana legislature convenes April 30.
Since Hurricane Katrina, Louisiana has moved to make itself a safer bet for insurers.