|(07 Aug 2023)
Louisiana has emerged as a hotspot for insurance-related civil litigation in federal court as repeated severe weather events undermine the region's insurance safety nets. According to TRAC's data on federal civil court filings, these lawsuits show a sustained increase across the state following severe weather events since FY 2020. Insurance lawsuits typically arise when residents are unsatisfied with the estimates and compensation provided by their insurance companies. So far in FY 2023, the Eastern District of Louisiana has seen the most insurance lawsuits, with 2,471 total and 255 in June alone. This is a change from FY 2021 and 2022 when the Western District of Louisiana received the largest numbers of insurance lawsuits in the state.
The timing of these lawsuits tends to be influenced by the one- and two-year filing deadlines as influenced by state law as well as other filing deadlines established by courts or other state agencies. Therefore these cases understandably arrive in court anywhere from several months to several years after the weather event itself. For example, Hurricane Laura, one of the most severe storms to hit the state, made landfall in western Louisiana in August of 2020, leading to a spike in insurance lawsuits in the Western District of Louisiana at the one-year and two-year filing deadlines in August 2021 and August 2022. Shortly after Hurricane Laura, Hurricane Delta made landfall also in western Louisiana at the beginning of October 2020, leading to a similar, although smaller, influx of lawsuits thereafter. Hurricane Ida, on par with Hurricane Laura in magnitude and severity, made landfall in eastern Louisiana in August 2021, similarly contributing to growing lawsuits in August 2022 and, according to the Eastern District of Louisiana, likely leading to an upcoming increase in lawsuits at the next filing deadline in at the end of August 2023.
These data on the high number of insurance lawsuits in Louisiana are one crucial aspect of a deeper insurance crisis in the state. In addition to the number and frequency of natural disasters, litigation has contributed to insurance companies' reluctance to issue policies to Louisianians. Insurance companies' business practices may also contribute to the number of insurance filings in Louisiana. For example, the State of Louisiana has taken action against a Houston based firm for allegedly filing faulty and/or fraudulent lawsuits. The state government has also sought to shore up the insurance market by passing legislation to incentivize insurance companies to stay in Louisiana, to lessen the risk for current insurers, and to attract new insurance companies to Louisiana. Hurricane Katrina seemingly stretched the limits in Louisiana, and the current high number of insurance filings have again raised concerns about the viability of the property insurance market in Louisiana have arisen.
As filing deadlines and the most severe months of the 2023 hurricane season approach, these data provide context to how weather events are impacting the federal courts, the insurance system, and the people living in Louisiana. Further details can be obtained through use of our online interpreter and tracfed tools.
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