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HOUMA -- You’re a 31-year-old Houma resident, recently married with a kid on the way.

Sarah Tassin-Guidry and her husband haven?t been able to build their dream home on the lot they bought in Sugar Ridge subdivision near Chackbay because they can?t get insurance.

The apartment you’ve been living in is suddenly looking cramped, and you’ve always wanted your own home anyway. While you’re not rich, with some financing, you can afford your first home.

After an exhaustive search, you find it, and it’s perfect. The lender says you’re good to go, except before it’s a done deal, he wants you to buy homeowners insurance, specifically wind and hail coverage because it’s south Louisiana, and hurricanes happen.

No problem, you think. How hard can that be?

Ask Sarah Guidry, and she’ll tell you it’s darned near impossible. Loretta Henry, Nikki Bush, Michael Martin, Doug Olden, Debra Anderson, Christine Lyons and Lori-Ann Bergeron won’t argue that point. They are just a handful of local residents who say they’re fed up with insurance. The lack of readily available and affordable coverage has made life difficult for many residents in Terrebonne and Lafourche and, insurance officials say, will likely frustrate many more in coming months and years.

But beyond individual aggravation, trouble getting or affording insurance can have consequences in the real-estate market as well as other areas of the economy. It could even have an impact on future population.

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Rates have doubled, tripled for many

The jump in the price of insurance has left some Terrebonne and Lafourche residents thinking about moving elsewhere.

Perhaps Lyons, a Bourg resident, summed it up best.

"This insurance thing is a real kick in the butt," she said.

Guidry, a Thibodaux resident, said she feels like insurance is dictating her life. She thought she was fulfilling a longtime dream when she purchased a lot in Chackbay to build her new house. Eight months later, the lot sits empty because Guidry can’t find insurance.

Guidry said her current insurance provider, Lafayette Insurance Co., refused to transfer the policy to her new house. She compiled a three-page list of insurance companies and began calling for quotes. Every company on the list told her it isn’t writing new policies.

Guidry said she will check the price for the state property-insurance plan, but if that’s too much money, she will consider selling her lot and giving up on her dream.

"That’s how much insurance can dictate our lives," she said.

NOT WORTH THE RISK

Hurricane Katrina, the most costly disaster in U.S. history, followed four weeks later by the ninth most costly catastrophe, Hurricane Rita, was overwhelming for Louisiana insurers.

The 2005 hurricane season was the most costly year on record, with insured losses of $40.6 billion from Katrina and $5 billion from Rita, according to the Insurance Information Institute, a nonprofit marketing group supported by the insurance industry.

Homeowners insurers in Louisiana are estimated to pay $12.4 billion in claims from the two storms, an amount equal to all homeowners premiums paid in the state since 1981.

In other words, the equivalent of the amount of money collected in the past 24 years from Louisiana policyholders had to be paid out in claims for damage caused by more or less two days worth of storms.

The hurricanes’ aftermath left insurance companies skittish about offering coverage in coastal Louisiana.

Private insurance companies do not have to do business in Louisiana. The Louisiana Department of Insurance and the state Insurance Rating Commission can regulate them and has some power to limit the ways companies can adjust their prices and coverage. But the state has no power to force companies to do business here.

Insurance companies are in business to make a profit. If conditions in a certain part of the state or country become risky, the insurance company likely will look to limit its risk by reducing coverage, raising rates or leaving that area altogether.

Louisiana Farm Bureau Mutual Insurance, the state’s fourth-largest insurer, has chosen a strategy of reducing coverage and raising rates.

Farm Bureau paid out a combined $440 million in more than 37,000 claims following Katrina and Rita. The company cancelled about 7,500 homeowners policies July 1 and then re-offered those customers policies without wind and hail. The cost of remaining policies went up an average of 49 percent.

The financial hit taken from those storms, along with the predictions for increased hurricane activity in the next decade, forced Farm Bureau to re-evaluate its business model, said Brian VanDreumel, Farm Bureau actuarial research and development manager.

"We had to adapt our business practices," he said.

Allstate, the state’s second-largest insurer, made headlines across the Gulf Coast last week when it announced its intention to drop wind and hail coverage for 30,000 homeowners in 18 coastal parishes, including Terrebonne and Lafourche. Louisiana Insurance Commissioner Jim Donelon vowed to fight the cuts, saying the company would violate state consumer-protection laws.

Allstate officials say the reduction in coastal policies is necessary from a risk perspective. Donelon said the law prohibits insurance companies from dropping coverage if the policyholder has been insured for three years and has not had more than two claims not considered "acts of God." He said the dispute likely would be settled by the Louisiana Supreme Court.

RATE HIKES INEVITABLE

Meanwhile, companies have been going before the Louisiana Insurance Rating Commission asking for price hikes.

In April, the commission granted Allstate approval to raise homeowners rates an average of 20.6 percent for nearly half its customers. The other half had rates go up an average of 9 percent. In the southern portion of the state, percentage increases ranged from the single digits to 52 percent.

In the past two months, the commission approved a rate hike of 35 percent for Allstate condominium insurance and gave two Allstate subsidiaries permission to increase homeowners rates. Encompass Insurance Co. of American and Encompass Property and Casualty Co. received the OK for a 12.2 percent average rate increase for its 8,586 customers. Encompass Indemnity Co. received permission for an 11.8 percent average rate increase for 5,410 customers.

In June, the commission approved rate hikes of 49 percent and 17 percent on two different homeowners policies written by Shelter Insurance Co., the 12th-largest insurer in the state.

State Farm, Louisiana’s largest insurer, with 32 percent of the market, has not made major policy or rate changes so far. The company raised rates an average 3.3 percent last year after the storms, said Morris Anderson, a State Farm spokesman in Baton Rouge. Anderson said he couldn’t comment on whether a heftier rate increase could be forthcoming but said State Farm officials are fully aware of models predicting more storms in future years.

"You’ll be paying’

Loretta Worters, vice president of communications at the Insurance Information Institute, said the rate hikes and coverage cutbacks are necessary to build up insurance-company reserves, which were largely wiped out from Katrina and Rita.

She said it’s important for both companies and consumers that the insurers have sufficient reserves in case there is another storm resulting in many claims.

"It’s not prudent business practice to not have enough reserve," Worters said.

As a result, the companies see the coastal area as having too much risk, Worters said. That’s why the exclusion of wind and hail policies from Farm Bureau and possibly Allstate could be the start of a trend.

Worters said she understands that coastal residents are frustrated by rising insurance costs and are looking for answers. But the reality is coastal residents live in a dangerous part of the country, she said.

"You’ll be paying for living in that area," she said. "The higher premiums are needed to offset the risk."

The companies’ profit-making mentality provides little comfort to local residents who see insurance as what you buy to guard against risk. Shying away because of too much risk seems to go against logic, said Bergeron, a Dulac resident.

"What is insurance for if they don’t want to insure risky areas?" she said.

Donelon said the availability problems are not unique to Louisiana. He said it’s an issue from New York down the Atlantic Coast to Florida as well as all Gulf Coast states.

Donelon said insurance companies aren’t writing new policies south of I-10 or I-12, and State Farm isn’t writing new ones south of Alexandria.

"It’s a very hard market all over," he said. "But it’s not unprecedented."

Donelon said the market tends to go in cycles. There are times when insurance is hard to find followed by periods when the market is competitive with lots of providers.

Other insurance experts aren’t as optimistic this is just another cycle. Worters said when insurers lose the equivalent of 24 years worth of premiums, it’s not easy to bounce back. Combine that with models predicting increased hurricane activity over the next decade, and companies may not be eager to provide insurance for high-risk areas for some time.

VanDreumel said Farm Bureau isn’t in a position to predict when it could re-offer wind and hail coverage to those excluded from it, especially since the forecast calls for more-frequent storms.

This problem isn’t unique to Louisiana. Other Gulf Coast states have experienced insurance availability problems. Some companies are exiting coastal markets in Florida, Alabama and Mississippi. Those staying behind in Florida are asking state regulators for hefty rate increases.

State Farm’s rates in Florida will increase an average of 52.7 percent this year. Nationwide Insurance Co. of Florida asked the state earlier this month for permission to raise homeowners rates by an average of 71.4 percent.

Locally, if you already have homeowners insurance, for the most part you can renew your policy -- albeit at a higher cost. Also, some companies will allow you to transfer your policy if you move, though that’s not always the case, as Guidry found out.

But if you’re trying to get insurance for the first time, or if you’ve had wind and hail coverage eliminated, your only option is the Louisiana Citizens Property Insurance Corp., a state-run provider of last-resort for residential and commercial property insurance.

The good news is you still can get insurance. The bad news is the state program is more expensive, harder to deal with, more cumbersome to sign up for, and it usually takes longer to file a claim and receive money.

ECONOMIC REPERCUSSIONS

Ed Daigle, an insurance broker in Houma for USI Gulf Coast, said many insurance companies already have all the risk they can handle. If they took on more policies, they wouldn’t have the money to pay off all potential claims.

"It’s not even about price," he said. "The first question is can you get someone to do it."

Daigle said the inability to insure property creates several serious potential repercussions. The list is topped by an economic slowdown.

Many new subdivisions and businesses are being built in Terrebonne, particularly in the area around Martin Luther King Boulevard and the La. 311 corridor. Sales tax is being collected at record levels, fueling the coffers of government entities such as parish government and the School Board.

But what happens if those prospective businesses can’t get property insurance? If new home or business owners need to borrow money, lenders will require insurance, Daigle said. If home or business owners can’t get insurance, then they can’t get a loan.

There is the state plan to fall back on, but it would cost the owner more money. If that’s unacceptable, those individuals will start looking to build elsewhere, likely away from the coast.

"These are people who would normally have enough income to justify the loan note," he said. "They would qualify, but not if they can’t get insurance."

If enough people move away because of insurance, it will impact the economy, said Robert Page of Houma, co-owner of C.A. Page and Sons Insurance Agency. He said labor shortages could be a problem in the oil-and-gas and seafood industries. The cost of goods could rise, and new construction would be greatly reduced.

It’s possible cities to the north will function as gateways to the Gulf instead of Houma because people can afford to live in places like Alexandria, where insurance is available and more-affordable, Page said.

Prospective businesses thinking about locating in Terrebonne do ask about insurance, said Michael Ferdinand, CEO of the Terrebonne Economic Development Authority.

Ferdinand said it’s too early to tell the long-term impact of last year’s storms on business insurance locally, but he said it would be a concern if companies can’t get cost-effective coverage.

"It can affect growth," he said.

Herb Picou, owner of Picou insurance, said it’s absurd that all the insurance companies have backed away from the Houma-Thibodaux area. He said some companies have drawn an imaginary line at Interstate 10 and refuse to write policies south of the highway.

"Like the wind will all of the sudden not be as intense one mile north of I-10 as it is south of I-10," Picou said.

BUSINESS PREMIUMS RISING

Kandy Theriot had 16 hours to decide whether to renew the hail and wind insurance for the Houma-Terrebonne Chamber of Commerce building on La. 311. While the short notice was bothersome, it was nothing compared to the price tag.

The existing premium was $1,300 a year. The new premium was $11,600. Theriot, the chamber’s president and CEO, is still astounded at the 800 percent increase.

"We never had a claim and we’re not in the part of the parish that’s been prone to damage," she said. "I don’t have a clue why this happened."

While she was supposed to get the renewal quote 30 days ahead of time, it came June 30, a day before the policy was set to expire.

Because that was the Friday before the July 4 holiday weekend, Theriot could not contact most chamber board members. With no room in the budget for an extra $10,300, she let the policy expire.

Theriot said some chamber members are going through similar ordeals.

The increased cost of insurance will impact everyone, she said. If the price goes up substantially, the cost will eventually be passed on to consumers.

"If a candle shop has to pay $17,000 for insurance, the price of candles will be more expensive," Theriot said.

The other concern is that new companies looking to locate in Terrebonne will be scared off by the lack or cost of insurance, she said.

Some businesses may opt not to have insurance because they can’t afford it. Ferdinand said that’s a risky venture, but he acknowledges some small businesses may have to do without it.

"It’s similar to an individual not having health insurance because he can’t afford it," he said.

'A sad situation’

Troy Cloutier, Lafourche-Terrebonne regional president for MidSouth Bank, said he discovered firsthand the problems of wind and hail insurance. Similar to the Chamber of Commerce, MidSouth was hit with a hefty increase at renewal time.

Cloutier declined to give figures because the bank and insurance company are trying to work out something both sides can live with, but he called the increase "outrageous."

Even before the renewal, Cloutier had a sense of the insurance problems because commercial loans have slowed. Because the business owner has to go through the state plan, it can take six to 10 weeks to apply for the insurance. That slows the sale of the property considerably, he said.

He said it could deter businesses from changing hands because of the extra red tape involved. It also could deter first-time homeowners who find the insurance out of their price range.

Which brings us back to the example of the 31-year-old first-time homeowner. If insurance is not readily available, everyone loses. The 31-year-old doesn’t get his dream house. The seller loses the sale. The real-estate agent loses a commission. The banker loses a loan. The insurance agent loses a new customer. In short, a lack of available insurance has wide-reaching effects.

"It’s a sad situation," Cloutier said.