Jim Beam Column: Hot Topic of Insurance Reform – American Press
Legislation is making its way through the State House and the Senate that aims to address issues policyholders have had with their insurance companies after hurricanes and other disasters. Communication was a major issue for policyholders following the 2020 and 2021 hurricanes.
The bills address too many adjusters (the #1 policyholder complaint), mediation to expedite claims settlement, helping policyholders understand their rights, and creating advice for investigating property insurance fraud.
Senator Kirk Talbot, R-River Ridge, and Chairman of the Senate Insurance Committee, sponsors Senate Bill 198. It would require insurers to send written progress reports to policyholders once a third adjuster is assigned to the claim within six months.
Some members of the Talbot committee struggled to give companies six months because with each new adjuster, the claims process essentially starts over. However, once a third adjuster is appointed, the bill requires the insurer to provide the policyholder with a detailed progress report.
This report would explain the actions that were taken, the dollar amount of loss coverage, and a list of any items in dispute. The insurer should also provide the insured with a primary contact and at least two direct means of communication with that person.
Talbot is also the sponsor of SB 163 which requires the state insurance commissioner to provide policyholders with a Disaster Claims Process Disclosure Form. It would explain how the claims process works, how additional claims work, the process for a policyholder to document an insurance claim and let them know they can file a complaint with the Department of Insurance State.
Sen. Jeremy Stine, R-Lake Charles, has half a dozen insurance bills and one on mediation was submitted to Talbot’s committee. Stine noted during the debate on Talbot’s adjustment bill that a friend is now looking after his 13and adjuster.
SB 212 by Stine would establish a statewide hurricane mediation program. It provides that each insured can seek mediation for a disputed claim on residential property for property damage up to $50,000 if the governor declares a state of emergency.
Sen. Gary Smith, D-Norco, said he would like to see a number above $50,000. He said some policyholders have faced claims of up to $350,000.
Stine said he had no problem increasing the number, but it will be done with an amendment during the debate in the Senate. Senators on the committee seemed to prefer claims as high as $150,000.
The legislation sets out 10 requirements with which a mediation company must comply. There are 15 things that the insurer and the insured must also comply with. Nothing in the bill applies to commercial insurance policies, private passenger auto insurance or disputes over liability coverages in property insurance policies.
Other Stine measures include increased penalties for failure to pay claims in a timely manner, authorizing the insurance commissioner to impose penalties on those engaging in unfair competition methods, establishing a database of experts in disasters and put in place more transparency concerning residential or commercial property damaged by a so-called storm or windstorm.
Rep. Ed Larvadain, D-Alexandria, is the sponsor of House Bill 692 which creates a 21-member council to investigate cases of property insurance fraud. Insurance Commissioner Jim Donelon spoke out against the bill, saying he was already paying 12 employees to investigate fraud.
Eric Holl, executive director of Real Reform Louisiana, said the bill’s goal was to create something full-time and focused on post-storm fraud. He said thousands of complaints had been filed with the office of the insurance commissioner.
Larvadain said: “He (Donelon) couldn’t exactly name an example of him dealing with fraud with landlords. He gave the perfect example of why you need it (the cheat chart).
Donelon gave two recent examples in which the department imposed penalties on an insurance agent and a policyholder. However, he did not know how many fraud complaints had been referred for criminal prosecution.
These bills and others have just completed the first stage of their legislative process — hearings and approval by the House and Senate insurance committees. If approved by one chamber, they move on to the other chamber for debate and final decision.
Home and business owners have made it clear that they want substantial changes in the way their property claims are handled. There is an indication that insurance companies will accept some of these changes. We can only hope that owners will never again face the incredible insurance problems they have experienced for the past two years.