How Louisiana businesses are struggling with insurance costs | Business News

breakpoint

Rising insurance premiums and increasing hurricane intensity are pushing many homeowners in south Louisiana to breaking point.

Read the series here.

On the surface, things look good for Stein’s Deli.

Business is going well. Regular customers still come to the restaurant, and some even put the namesake sandwich on their menu, which has become popular. The deli has grown from a humble business led by its first post-Katrina owners to a cornerstone of the local food scene.

But on a recent Monday, Dan Stein, the deli’s longtime owner, revealed something that’s been bothering him lately. Chaos is creeping behind the scenes.

The insurance crisis is hitting home, with premiums rising across Louisiana and some people fleeing to states with fewer disasters.

Stein’s rent in the Magazine Street building, where the deli has been based since 2007, has increased 30% this year, largely because insurance costs hit landlords. For the same reason, the mortgage payment on his home increased by $1,400 a month. Employees say their salaries won’t increase that much because rents are rising. Stein expects other businesses to close in larger numbers.

“Back in the day, you used to watch your bank account grow over time,” Stein said. “Right now it’s going up and down. It’s like treading water. And I’m probably lucky.”

The insurance crisis has emerged as a financial stressor for homeowners living in dangerous locations across the United States. In Louisiana, incomes are falling, people are leaving the state, and home prices are taking a hit, which poses an existential threat to many residents and businesses.

Stein, 52, opened the deli a few years after Hurricane Katrina. He has worked for years in a variety of professions, including as an attorney on the Fifth Circuit Court of Appeals and as a cheese store owner in his home state of Pennsylvania.

The headwinds brought about by the insurance crisis are unlike anything he has experienced before.

Stein worries that strong business driven by big events like Taylor Swift’s Ellas Tour and the upcoming Super Bowl will obscure how deep-rooted the insurance crisis is. , said it could upend small businesses across New Orleans.

Louisiana Republican Insurance Commissioner Tim Temple, along with Gov. Jeff Landry and the Republican-led Legislature, is pushing a series of reforms this year aimed at making it easier for insurance companies to raise premiums and cut policyholders. I led the way. And the state has earmarked $45 million for a grant program to help people install reinforced roofs on their homes starting in 2023.

But there are few signs that the crisis is abating. Insurance premiums continue to rise. Stein pointed out that the Enhanced Roofing Program also does not provide assistance to commercial businesses.

Several business owners who live in low-lying areas around the coast told the Times-Picayune. Advocates say the cost of insurance is making it impossible for them to continue working. For example, Dawn Voisin, who bought and renovated a small shopping center in Houma that was damaged by Hurricane Ida, said she faced insurance claims that exceeded the business’ annual profits.

And insurance isn’t the only problem businesses are facing. At Stein’s Deli, a person with the same name said rising food costs and meal delivery apps were making it difficult to stay afloat.

Stein said he knows the deli won’t make him a “millionaire” and that he has enough money to survive.

But he worries it’s only a matter of time before the insurance crisis hits more businesses.

“I never thought about closing,” he says. “I’m a bit of a weirdo. I like it here. That’s why I’m willing to fight. But when you lose all your friends and all your business, at what point do you no longer want to do it?”

“The vibe of this city isn’t made up of the super-rich. It’s the musicians. It’s the restaurants. You start to lose that… You like it here, but then you start chasing memories. .”