Hurricane-prone Louisiana, with some of the country's priciest homeowners insurance, is one of the most exposed to the problems as rising premiums make property insurance difficult to afford and obtain...
- Extreme weather events in Louisiana, such as the destructive Hurricane Laura in 2020 and Hurricane Ida in 2021, have played a key role in the surge in property insurance rates.
- Risks for the state and its local governments include lagging property values and tax collections, and population loss.
- At the same time, the state’s governments face rising infrastructure costs to mitigate future storm damage and a slower recovery after a storm hits.
- Louisiana faces high credit exposure to physical climate risks such as hurricanes, flooding and rising sea levels.
“Weather events and property insurance costs can intensify financial burdens and credit risks for the state and local governments such as a revenue slowdown and population loss, particularly among working-age adults,” says Adebola Kushimo, Senior Credit Officer at Moody’s Ratings. “Additionally, increasing risks of damage from extreme weather can drive up costs to build infrastructure intended to lessen storm damage.”
