(The Center Square) — Home insurance in Louisiana was a big issue for legislators to address in the session that ended Monday and several of those bills have been signed into law or await a decision.
After hurricanes Laura, Delta, Ida and Zeta made landfall in the state in 2020 and 2021, many insurers became insolvent or left the state entirely, leaving homeowners with only the most expensive options.
As a result, Tim Temple, the new insurance commissioner and Gov. Jeff Landry pushed for deregulation of the insurance market to encourage companies to come back.
“I hear from people everyday that can’t afford their insurance and maintaining status quo is not going to help us,” Temple said during a committee hearing earlier in the session. “The totality of everything we’re trying to do is to create a competitive market.”
Leading the charge is House Bill 611, which repeals the three-year rule that says an insurer cannot cancel or fail to renew a customer’s policy if held longer than that time frame unless for a provided reason like a lack of payment or fraud.
Under this new bill already signed by the governor, an insurer might refuse to renew up to 5% of its customers’ policies per calendar year for any reason, provided that no more than 5% of those without renewals are in one parish.
Some lawmakers expressed concerns about deregulation, specifically in the short term before the market could correct itself. Rep. Matthew Willard, D-New Orleans, said during a committee hearing earlier in the session that many families will lose generational homes because they’ll be dropped from insurance plans.
“My biggest concern with this bill right now is the impact that it will have on those policyholders who have protections from the three-year rule,” Rep. Willard said.
Willard said he is also worried this will force those homeowners onto Citizens, Louisiana’s insurer of last resort, which he says is not good for the state if an inevitable storm happens.
Senate Bill 295 allows insurance companies to increase premiums without having to get pre-approval from Temple’s department.
To curb issues with unscrupulous companies, HB 257 raises penalties on insurers for failure to comply with certain directives with fines of up to $1,000. SB 323 helps prevent insolvency by giving insurers more time to pay out claims without penalty, known as a cure period.
Both insurers and consumers would benefit from HB 120, which extends the termination date of the Louisiana Fortify Homes Program, an initiative that provides grants to qualifying consumers to fortify their roofs to protect against severe weather.
The same goals that Landry and Temple had in the home insurance field they applied to the struggling car insurance industry. That could not be made more evident than in the case of HB 423, which limits money awarded in excess of medical expenses to the injured party in a car accident.
HB 337 prevents insurers from being named initially in lawsuits involving an injured person in a car wreck. Named the Direct Action bill, the law would keep plaintiff attorneys from knowing how much liability insurance is involved in a case until a second lawsuit.
If rejecting an initial offer and opting to pursue a greater victory in court, SB 84 says if the final amount obtained by either plaintiff or defendant is 25% or more in favor of the offering party, the offeree must pay their court costs.
This new law will provide an incentive for parties to settle.
“This would resolve current imbalance in the law, encourage early settlement within a reasonable range and aligns Louisiana with other states,” Temple said during the session.
