With the recent rise in catastrophic hurricanes and storms that have decimated large swaths of Louisiana, property insurance rates have become a pressing issue for lawmakers in Baton Rouge. Following the damage done by hurricanes in the last two years, some changes have already been made to address problems in the insurance market.
While these initial efforts to stabilize the insurance markets and give insurers the ability to address the additional risks they are bearing have been signed into law, lawmakers have continued their efforts to address the issue further.
Special legislative session held to pass insurance reform
In February of this year, the Louisiana legislature convened for a special session to pass a pair of bills designed to address the current crisis in insurance. The primary purpose of the bills passed was to establish a $45 million fund to support insurance companies as they are facing an unprecedented amount of claims. This money would be used to encourage insurance to continue doing business in Louisiana and suppress an exorbitant rise in premiums for policyholders.
In addition to helping insurers, these bills are also intended to relieve pressure on the state’s insurer of last resort, Louisiana Citizens Property Insurance (LCPI). The hope is that these new measures will allow other insurers to retain these policies rather than the state assuming responsibility for them.
Further solutions are being considered to address the ongoing issues
Even with the solutions already underway, others are being considered to support the further recovery of the insurance industry so that it can continue serving policyholders effectively. The Louisiana Department of Insurance is at the front of finding solutions to stabilize the insurance market in the state. Their goal is to create an environment that will attract more insurers to the state to reduce the burden on existing providers.
Current policies being proposed would raise evidentiary requirements for submitting a home insurance claim, while another prohibits homeowners from giving a contractor the right to collect on their insurance policy for performing work on their home. Additional suggested policies included greater protections for LCPI, and raise qualifications for and duties of appraisers.
With all of the changes that the Commissioner and the legislature are currently contemplating, it is imperative to remain up to date about the latest news coming out of Baton Rouge. These proposals to insurance law can potentially create significant changes in the dynamic between insurance providers and policyholders, so it is important to understand and prepare for them.