• Allstate and USAA have agreed to cover additional living expenses for policyholders in Louisiana who evacuated their homes, a White House official told CNBC.
• More companies were expected to follow suit, said the official, who requested anonymity in order to discuss efforts still underway.
• The insurers are heeding President Joe Biden's call that they cover additional living expenses for policyholders who were not under specific mandatory evacuation orders.

WASHINGTON – Two of the most prominent U.S. insurance companies have responded to President Joe Biden's call to cover additional living expenses for policyholders in Louisiana who evacuated their homes ahead of Hurricane Ida, but were not under specific mandatory evacuation orders.

Allstate and USAA have agreed to cover additional living expenses for policyholders in the state who evacuated their homes, a White House official told CNBC.

More companies were expected to follow suit, said the official, who requested anonymity in order to discuss efforts still underway.

Typically, insurance policies only cover additional living expenses for policyholders who have been ordered to evacuate their homes ahead of major storms, not for those who choose to leave their homes voluntarily.

Biden first raised the issue Thursday in a speech at the White House about the storm.

"Right now we're hearing reports that some insurance companies may deny coverage for additional living expenses unless the homeowner was under a mandatory evacuation," Biden said.

Homeowners in the storm's path, he said, "left their homes because they felt it was flee or risk death. There's nothing voluntary about that."

Biden then appealed to home insurers: "Do the right thing. Pay your policyholders what you owe them and cover the cost of temporary housing in the midst of disaster. Help those in need."

On Friday Biden visited Louisiana, where he said his administration is putting "as much pressure as we can" on insurance companies.

The state's insurance commissioner, James Donelon, issued a bulletin Friday to all insurers in the state, saying they "should waive the language contained in their insurance policies requiring mandatory evacuation to trigger civil authority coverage."

Donelon also directed insurers to inform his office of whether or not they would abide by the request, raising the stakes for companies if they decide to deny coverage.

After this story was published, a USAA spokesperson told CNBC, "Some USAA homeowners' policies provide limited coverage for evacuation expenses, when there is damage that is covered. Members can provide receipts for consideration of reimbursement."

The episode is a rare example of a U.S. president effectively shaming huge corporations into changing a bedrock piece of their operations — namely how insurance companies gauge coverage eligibility.

The policy shift's origins can be traced back to Cedric Richmond, a former Louisiana congressman who is a top official in the Biden White House.

In the days following the storm, Richmond heard from homeowners that their insurance policies were not going to cover the cost of temporary housing unless their homes had been under mandatory evacuation orders.

Ida made landfall as a Category 4 hurricane across most of southeastern Louisiana last Sunday. Still, evacuation orders varied widely from parish to parish.

Some parishes on the coast, like Grand Isle, issued mandatory evacuations for all residents. But others issued evacuation orders that were only mandatory for people in low lying areas, and voluntary in areas better insulated from flood waters.

In New Orleans, Mayor LaToya Cantrell issued a mandatory evacuation order for people living outside the city's levee system, but a voluntary one for people protected by the levees.

"We're not calling for a mandatory evacuation, because the time simply is not on our side," Cantrell said the Friday before the storm. "We do not want to have people on the road, and therefore in greater danger, because of the lack of time."

During his visit, Biden encouraged anyone impacted by Ida to contact the Federal Emergency Management Agency and see what kind of assistance they might be eligible for, and he pledged to keep federal resources there as long as it takes to fully recover.

"We're going to be here for you," he said.

The leading trade group for the homeowners insurance industry said its members were aware of the suffering caused by Ida, and eager to help.

"Ida has devastated communities along the gulf coast and up the eastern seaboard. Insurers recognize the tragedy and anxiety that many American families, individuals, and businesses are facing as wildfires and severe weather are raging in the midst of uncertainty over the pandemic," David Sampson, president and CEO of the American Property Casualty Insurance Association, said in a statement to CNBC.

"Policyholders who have sustained damage should call their insurer as soon as possible to start the claims process. Call your insurer if you evacuated, whether it was voluntary or mandatory, to talk through your coverage. Policies may vary by company and by state," he said.