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Hurricane Claims in Louisiana Cause Bulletins and Financial Failures – Real Estate Insurance Law Blog



The Louisiana Department of Insurance works overtime as two years of strong hurricanes hit insurance companies hard to make ends meet and insurance adjusters comply with claims rules. Last week, the Louisiana Department of Insurance applied to take over two regional insurance companies. This followed a bulletin on October 27 that reminded everyone of the rules that apply after hurricane losses.

The bulletin listed a number of notable reminders about adjusting property claims in Louisiana:

1. Policyholder's Declaration of Rights – La. R.S. 22:41 indicates the standards that insurers must follow when treating their policyholders. Insurers are instructed to review this Statute and ensure compliance with all applicable regulations.

2. The insurer shall provide the principal right report to the policyholder-In accordance with La. RS 22:41

(14), in connection with claims for damages from a first party, the policyholder shall have the right to request and receive from the insurer all estimates, tenders, plans, measurements, drawings, engineering reports, contractor reports, statements or documents that are not legally privileged as the insurer has established, had prepared or used during its adjustment of the policyholder's claims.

3. Initiates the damage process – La. R.S. 22: 1892 (A) (3) prescribes that the insurer, in the event of a catastrophic damage event, shall commence claims settlement of a claim for damages within 30 days after the policyholder has reported the damage. In accordance with § 4743 of ER 47, due to the seriousness of the devastation caused by Hurricane Ida, insurers had an additional 30 days to initiate a claim adjustment of a property claim after the policyholder had reported the damage. Therefore, insurers had a total of 60 days to initiate claims settlement of a claim for damages after reporting a claim by the policyholder.

4. Communication with policyholders – Insurers should immediately communicate with their policyholders throughout the claims settlement process, continuing through the initial claims payment and any additional claims handling. In fact, insurers are required to respond to all inquiries or requests from the insured within 14 days of the request or request under La. R.S. 22: 1896. Insurers should also communicate immediately with designated producers to assist policyholders in the claims process.

5. The process of proof of loss – Insurers are reminded that in good faith they must try to implement a quick, fair and just settlement of claims and that they owe their policyholders an obligation to show good faith and fair handling in accordance with La. R.S. 22: 1964 (14) (f) and La. R.S. 22: 1973 (A) and as further discussed in Bulletin 2021-02 and Bulletin 2021-03.

9. Insurers must pay uncontested claims within 30 days – According to La. RS. 22:41 (13), the insurer shall, within 30 days after satisfactory proof of damage, pay the policyholder the amount of an uncontested claim. Any undisputed part of a claim that has not been paid within 30 days after the submission of satisfactory proof of loss by the insurer can be considered to be in conflict with La. RS. 22: 1892 and La. RS. 22: 1973.

Unfortunately, two regional insurance companies in Louisiana did not survive these storms financially. The Louisiana Insurance Guarantee Association will eventually pay these claims, but the claims are limited to $ 500,000 per event with a deductible of $ 100. Insurance Journal quoted Louisiana Insurance Commissioner:

"We are taking steps to protect policyholders," Donelon said. "Historic back-to-back storm seasons along with the average cost of claims that come in higher than expected due to the pandemic got us where we are today. The good news is that LIGA can pay up to $ 500,000 per claim and is ready We have actively monitored market conditions and were prepared to do what needs to be done. "

Historically, major catastrophes that usually involve urban fires have bankrupted many fire insurance companies. ensure that these fire insurance companies were financially and technically sound and would not leave citizens without an economic safety net.Today, major regional disasters with wind and forest fires cause similar economic pressures on insurance companies and keep insurance departments busy monitoring this important industry. [1965912005]. ] Thought for the day

[119] What the insurance companies have done is to turn the business around so that the general public generally insures the insurance companies.
—Gerry Spence


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