New sinkhole outrage: Homeowners are losing insurance

So far about the only thing that hasn’t happened to the beleaguered residents of Louisiana’s Assumption Parish is a plague of locusts.

Yet.

Since last summer, homeowners in and around the Bayou Corne community, about 70 miles west of New Orleans, have been dealing with the effects of a massive sinkhole. Some 150 families were forced out of their homes in early August, with no indication of when they’ll be allowed to return. They’ve felt the earth move under their feet, and watches strange, malodorous gases bubble up from the swamp. There’ve been warnings over what’s in the air that they breathe — about methane and radium and toxic chemicals. All the while, the hole in the ground — caused by a failing salt cavern belonging to the Texas Brine Co. — nears the size of the Louisiana Superdome.

Now this: Homeowners who’ve been driven from their homes because of this environmental calmnity are losing their insurance:

BAYOU CORNE — Louisiana Commissioner of Insurance Jim Donelon said Tuesday his office is making a general inquiry into allegations that insurers are not renewing homeowner’s policies of residents evacuated due to the large sinkhole in Assumption Parish.

Donelon cautioned that his office has not received a formal complaint but has been asked by the parish Police Jury to look into the matter and more recently was informed by the Independent Insurance Agents of Louisiana about alleged non-renewal of policies.

What’s going on?

In interviews with two evacuated residents and parish officials in the past two weeks, some said insurers were not renewing or had threatened not to renew their policies because their homes had been left vacant for more than 30 days.

In another case, a non-renewal letter cited “increased hazard” and a “substantial change in risk” after a resident filed a claim due to tremor-induced damage. The claim was also denied. The resident and company agreed to part ways.

Residents also reported agents asked them to consider policies designed to cover vacant dwellings.

Unfortunately, this sounds like the proverbial tip of the iceberg. Local officials tell the Advocate newspaper that there’s certainly more than a couple of homeowners involved. It appears that many residents will be protected by Louisiana insurance laws that allowed thousands to continue their policies after natural disasters such as Hurricane Katrina — but the scope of the situation still isn’t clear.

To me, this all smacks of the same problem we’ve seen with the sinkhole since Day One: A completely passive — and wholly inadequate — response to a crisis that just keeps getting worse by the hour. Let’s review: It all starts when state regulators chose to ignore an early 2011 warning from Texas Brine Co. of serious structural problems with the salt cavern — compounded by failing to react to the tremors, bubbling gases, and other warning signs over the summer of 2012.

Since the sinkhole emerged, the guiding force of the Jindal administration has been this: Hoping the problem goes away. Gov. Bobby Jindal refuses to visit the site — just an hour’s drive from his back door — and Louisiana has largely ceded the heavy lifting to Texas Brine. whose main passion has been trying to deny blame for the problem. Now we have local officials begging Baton Rouge to sort out this insurance mess.

The Jindal administration needs to majorly step up its game here. It needs to push for a timetable when the residents of Bayou Corne can safely return to their homes, with solid ground under their feet and clean air to breathe, and it needs to guarantee there won’t be dire consequences — like the lack of homeowners’ insurance — for citizens because of the negligence of large corporations and state regulators.

And it needs to start today.

To read coverage from the Advocate about the insurance cancellations in Assumption Parish, check out: http://theadvocate.com/news/5109404-123/residentsinsurancepoliciescanceled

For my Jan. 22 blog post asking why Gov. Jindal is afraid to visit the sinkhole, please read: http://www.stuarthsmith.com/why-is-gov-jindal-afraid-of-visiting-the-sinkhole/

For full coverage from this blog about the sinkhole crisis, check out: http://www.stuarthsmith.com/category/featured-news/louisiana-sinkhole/

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