La. Senate Approves Gov. Blanco-backed Deductible Measure

May 17, 2007

Insurance companies should be allowed to adjust their homeowner policies’ deductibles depending on a property’s distance from the Gulf coast and the risk of hurricane damage, the Louisiana Senate has decided.

Under current law, deductibles must be at the same rate statewide.

The insurance industry and the Blanco administration are backing the bill (Senate Bill 204) by Sen. Don Cravins, D-Opelousas, that would allow insurers to set different deductible levels for each of three geographic zones: coastal parishes, central Louisiana and northern Louisiana.

The measure is expected to allow insurance companies to lower deductibles in northern Louisiana and raise them along the coast.

The Senate approved the bill 37-2, sending it to the House.

Senators rejected another insurance measure – opposed by the industry – that would impose a new requirement on the companies. Sen. Derrick Shepherd’s bill would force an insurance company to offer homeowners policies to veterans or people on active military duty, if the company also offers car insurance.

Shepherd, a member of the U.S. Army Reserves, said Louisiana should make every effort to treat military families well.

“They should be treated special,” said Shepherd, D-Marrero. “Louisiana should be recognized as a state that treats veterans right.”

Several senators said they objected to Shepherd’s attempt to inject government into the insurance market at a time when Louisiana is struggling to find insurers willing to write homeowners policies, because of the risk of hurricane damage.

“We’re trying to bring insurance companies into Louisiana, and I’m concerned that by mandating insurance companies to do something, it might have the opposite effect,” said Gerald Theunissen, R-Jennings.

Fifteen senators voted against Shepherd’s bill, and 13 were in favor.

On the Net: Senate Bills 139 and 204 are posted at

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