Louisiana lawmakers passed several bills last legislative session in response to insurers’ handling of recent natural disasters, five of which went into effect Jan. 1, 2023. The legislation resulted from a shaken homeowners insurance market that experienced eight insurers leave the state since Hurricane Ida.
The five laws enacted in January address are diverse in scope, ranging from an alternative dispute resolution program for hurricane claims up to $150,000, to a database of registered insurance adjusters. Here is a rundown of new Louisiana laws to know for 2023
Senate Bill 212 establishes the Hurricane Mediation Program, an alternative way for insureds to settle residential property claims up to $150,000 after a named windstorm event. The law is modeled after a mandatory mediation program issued by the Louisiana Department of Insurance (LDI) in the wake of Hurricanes Katrina and Rita in 2005. The mediations resulted in approximately 12,000 property damage disputes with a “very high level of success” according to bill sponsors. After Hurricane Ida, LDI again established a mediation program to give insureds an alternative way to resolve residential property insurance disputes.
The Hurricane Mediation Program requires that if the insured chooses to mediate through the program, the insurer shall contact one of the participating mediation firms listed on LDI’s website. Within five days after receiving its assignment, the mediation firm shall give written notice to the insurer and insured and shall set the matter for mediation within 30 days of its assignment. The mediation session may last up to 90 minutes of actual mediation with the insurer and the insured.
The bill includes language that incentives the insurer to participate should the insured choose the mediation program. If the insurer fails to appear at the mediation conference, it must pay the insured up to $250 for expenses incurred traveling to and from the conference.
If a written settlement is agreed upon at mediation, the insurer has 30 days to disburse the settlement.
House Bill 831 allows for insurers to provide additional living expenses in the event of a total loss to the insured’s dwelling during a covered event. If the insured has additional living expense coverage, the insurer shall pay an advance amount equal to the estimated value of three months of increased cost of living expenses as defined by the policy. Payments of additional living expenses shall be payable if it is determined that the actual cost exceeds the amount previously paid.
House Bill 521 requires insurers to provide greater transparency for catastrophe response plans. The law states that catastrophe response plans shall include:
- Emergency contact information of key personnel
- Alternative office locations or work sites likely to be used in the event of a catastrophe
- Procedures to address the backup, storage, retrieval, and security of records and data used to adjust claims
- Methodology to determine the approximate number of field adjusters, desk adjusters, and other administrative personnel necessary to respond to the catastrophe
Every insurer, health maintenance organization, and third-party administrator must file a catastrophe response plan that conforms to the law by June 1, 2023.
House Bill 317 creates a separate homeowners’ policy form that lists the specific amount for each deductible expressed as a percentage of insured value of the property, or as a specific dollar amount, or both. The bill is intended to provide homeowners with greater clarity on deductibles in the event of a named storm, hurricane, or wind and hail event.
If the insurer changes the percentage or specific dollar amount of any deductible listed in the policy, it is required to provide a new form and request it be signed by the insured.
House Bill 682 establishes a database of claims adjusters working in Louisiana. The database shall include a profile for each claims adjuster that includes their full name, license number and status, date of license or registration, number of years adjusting property claims, and the number of claims the adjuster has adjusted over the past five years. Additionally, a profile must include any complaints or administrative actions filed against the adjuster.
LDI will display a search tool on its website that members of the public can use to find a claims adjuster’s profile within the database.
House Bills 317 and 682 were among bipartisan legislation aimed at delivering transparency amid storm aftermath, Louisiana Gov. John Bel Edwards said last spring.
“”I’ve said it before and I’ll say it again – after a natural disaster, it’s unacceptable that many Louisianans are more scared of their insurance companies than the storm itself,” Edwards said at the time. “It’s simply unconscionable that homeowners must fight through constantly changing adjusters, lack of response, and fine print that hikes their deductibles, just so they can rebuild what is theirs. After a hurricane, our people have enough to worry about without having to be concerned that their insurance companies will simply leave them stranded in an endless cycle of claims denials.”
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