Sunday, May 26, 2024

Louisiana House considers bills dealing with the state’s insurance crisis

by BIZ Magazine

By Victor Skinner, The Center Square contributor

The Louisiana House Committee on Insurance considered numerous insurance reform bills this week designed to help homeowners struggling with the state’s insurance crisis.

Several of the bills would implement suggestions from the Department of Insurance to fortify homes and secure discounts for the work, while others aim to clarify elements of the claims process and crack down on bad actors.

The committee approved two identical bills on Thursday, House bills 309 and 294, to require insurance companies to provide discounts to ratepayers who fortify their roofs to higher standards. Currently, the discounts are optional, and DOI officials told the committee none have offered a discount in the last two years.

“The more fortified roofs that we have and fortified homes that we have, the less the payments are going to be from the insurance companies” in the event of a storm, said Rep. Ray Garofalo, R-St. Bernard, sponsor of HB 309. “If you look at actuarial tables, it will bring down rates.”

Garofalo also sponsored HB 604 to clarify elements of the claims dispute process by setting standards for appraisers and umpires, defining parties involved and procedures for selecting umpires.

Committee members including state Rep. Edmond Jordan, D-Baton Rouge, questioned whether qualifications in the bill would limit the number of appraisers available for the work, as well as the costs and complexity of the process.

“I just think it makes it more tedious, it’s adding more cost to it, it’s adding more bureaucracy to the process,” Jordan said.

Rep. Michael Firment, R-Grant, suggested higher qualifications for both umpires and appraisers, noting the bill would only require three years of experience.

“That’s not enough, in my opinion,” he said.

Firment also suggested the pay rate for umpires in the bill of $150 an hour is too low.

Those concerns and others ultimately prompted Garofalo to voluntarily defer the bill to address the issues.

Rep. Marcel Cormier, D-Plaquemines, also voluntarily deferred HB 287, designed to allow homeowners to access initial reports from field adjusters before they reach a desk adjuster. After discussion, committee members suggested a means of implementing the change through Louisiana’s Policyholder Bill of Rights, and Cormier agreed to revisit the bill in a future hearing.

The committee unanimously approved HB 110, sponsored by Firment, to require insurance companies to offer an endorsement to upgrade roofing damaged by storms to fortified standards before roof replacement begins. The legislation, Firment said, would promote the transition to fortified roofs, which entail sturdier edges, impenetrable and sealed roof decks, better attachments, and impact-resistant shingles.

Another Firment bill, HB 183, was also unanimously approved to target unscrupulous contractors who have partnered with law firms to convince homeowners to sign over their assignment of benefits, which transfers the rights of a policyholder to a third party.

“This scheme has been used by out-of-state contractors and out-of-state law firms to take advantage of Louisiana policyholders who are tricked into signing unethical contracts and often left with not enough money to complete repairs after the unscrupulous contractors and law firms get their cut,” Firment said. “This bill will completely end assignment of benefits arrangements.”

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