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Hurricane Ida Voluntary Mediation Program for Housing Claims – Property Insurance Coverage Law Blog



The Louisiana Department of Insurance instituted a voluntary mediation program for housing claims of less than $ 50,000 in litigation that went into effect yesterday. The bulletin announcing this program explained the historical basis of this program:

In the wake of the property destruction caused in 2005 by Hurricane Katrina and Hurricane Rita, Louisiana Department of Insurance (& # 39; LOI & # 39;) issued Emergency Rule 22, which established a mandatory mediation program. The mediations carried out in accordance with Emergency Rule 22 resulted in the mediation of approximately 12,000 disputes about property damage with very high success. Given the success of that mediation program, the LOI is optimistic that a similar mediation program, called the "Hurricane Ida Mediation Program", could yield similar successes.

I was a participant in — and a subsequent recipient of complaints about — the voluntary mediation programs in Louisiana and Mississippi after Hurricane Katrina. The only thing that remained in my mind was the uninterrupted digging of the mediations about protracted disputes and the peace of mind that the policyholders could get if they just accepted the insurance company's low ball offer. Instead of discussing what was owed and the remedies that the policyholders had for delayed and low ball offers to settle, my impression was that scary tactics and pressure were placed on policyholders in the face of a situation with which they had little familiarity.

While a fair settlement is good and should be promoted as a matter of good public policy, a bad settlement forced by a head-on strike is simply not right. If you are a Louisiana policyholder and decide to participate in a voluntary mediation, you should at least talk to a qualified legal counsel before the mediation so that you are fully aware of your rights! Good mediators will not insure policyholders and should encourage policyholders to seek legal advice before signing a full and final edition.

Over a decade ago, I wrote in, Impressions after the alternative dispute resolution round table about the insurance industry's hope that mediation can resolve damages with policyholders who are deceived in the mediation process. Some of these clients and their lowball brokers even offer news in Biloxi after Katrina:

The insurance industry wants to run mediation. It wants to do this in order to avoid the perceived negative results of assessment and still provide an alternative to disputes. My impression is that the insurer's financial desire to reduce the severity of the claim (the average amount an insurer pays out for claims) can be achieved through a negotiation process where the insured can take advantage of the prospect of delays and costs. Insurers train adjusters in how to negotiate and even a voluntary mediation process can be abused. A biloxi tv station ran a feature of clients we represented who twice went through the Mississippi Department of Insurance mediation program after Katrina.

Mediation is good if the parties are equal at the negotiating table. Most policyholders are not professionals about the benefits of their insurance and how to measure their loss. They have no experience of negotiating in mediation. Most policyholders are not aware of all their rights. The mediator is not there to train the policyholder but to get a solution. Get advice before mediation and do not go in without first talking to a qualified legal adviser.


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