FOR IMMEDIATE RELEASE

December 15, 2020

LDI to Appear at Joint Insurance Committees on Pandemic and 2020 Hurricane Season

Insurance Commissioner Jim Donelon and members of his staff will describe how the Louisiana Department of Insurance (LDI) has worked to support and protect policyholders during the pandemic and the record 2020 hurricane season Wednesday at a joint meeting of the Committee on Insurance.

The LDI will release hurricane claim and company complaint statistics for the first time at the hearing, which will take place at the Louisiana State Capitol at 10 a.m. in Hearing Room 4.  

“The Department has been incredibly active this year, looking out for consumers through emergency rules, in-person consumer outreach across the state after major hurricanes, and a robust complaint process that has already helped policyholders recover over $11 million,” said Commissioner Donelon. “We have been there for consumers in their hour of need, and we will continue to be there for them until their homes and businesses have been rebuilt.”

This year’s hurricane season has been the most active in history. Louisiana was hit by two tropical storms and three hurricanes that collectively caused an estimated $14 billion in damage across the state. As of Nov. 20, 236,928 claims have been filed in all lines of insurance related to hurricanes Laura and Delta.

Emergency rules have been a critical tool in protecting citizens this year.

In March when covid-19 cases initially spiked, the LDI issued a slate of emergency rules to keep health coverage in place for Louisiana consumers and provide for telehealth visits and safe access to prescription drugs. The department actively monitored the effects of the pandemic on health insurers and other types of insurance policies, and continues to do so today.

When Hurricane Laura devastated the Southwestern coast in August, LDI enacted Emergency Rule 45 to keep policies in place to help policyholders affected by the storm.

The Department also has reminded insurance companies of their obligations to policyholders through bulletins and advisory letters to make sure that companies act in accordance with state law and meet consumer needs.

LDI has also worked directly with consumers as they navigate the insurance claims process.

The LDI Office of Consumer Advocacy and Diversity partnered with Mayor Nic Hunter of Lake Charles to open a resource center for those affected by hurricanes Laura and Delta. For a period of six weeks, including Saturdays, LDI staff members traveled to Lake Charles to meet with consumers, go over their policies, answer their questions, reach out to insurers on their behalf, and, if necessary, take complaints. LDI staff members helped almost 300 families at events in Lake Charles and New Orleans and made inquiries to insurers on their behalf.

Early in the new year, a radio campaign throughout the parts of the state affected by Laura and Delta will urge residents to continue calling LDI when they need help.

If policyholders reach an impasse with insurers, a dedicated catastrophe team at LDI stands ready to take their complaints.

In 2015, LDI re-vamped its complaint process by taking property, life and health insurance complaint-handling out of their respective departments and putting them into a new unit, the Office of Consumer Services. Using well-defined criteria and strong technology to document and track complaints, the Consumer Services group investigates grievances on behalf of consumers. This season, LDI assigned five of its 14 complaint examiners to a special “catastrophe team” dedicated to hurricane complaints.

The catastrophe team has received more than 700 complaints related to hurricanes Laura, Delta and Zeta. The group has already resolved more than 450 of those grievances, recovering more than $11 million for consumers who can now use that money to rebuild their homes.

One bright spot for consumers is that despite a record number of storms, the property insurance market is significantly healthier and more stable than it was after hurricanes Katrina and Rita in 2005. While rates are expected to rise, the Louisiana Department of Insurance does not expect a significant contraction in the availability of coverage.

A bellwether for the health of the Louisiana insurance market is Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort.

After hurricanes Katrina and Rita, Citizens couldn’t afford to pay claims, resulting in a $193.5 million assessment on all Louisiana insurance policies followed by a $978 million bond issue that continues to cause assessments on all property insurance policies through 2026. Today, Citizens is in such good financial shape that it will only need to cover the retention of $35 million for claims related to the 2020 storm season because of a robust reinsurance program, even as it faces losses estimated at almost $100 million. Despite the record 2020 storm season, there is no risk of assessments on policyholders as in the aftermath of Katrina and Rita.

A look at Citizens also reveals that Louisiana’s insurance market is significantly more competitive than it was after hurricanes Katrina and Rita, when Citizens grew to be the third largest writer of homeowners insurance in the state with about 9.8% of the market. Today, Citizens is responsible for just 0.3% of the Louisiana homeowners market, meaning that more Louisianians found coverage in the private market.  

The Louisiana Department of Insurance continues to enforce laws and regulations to protect policyholders and seek market solutions to the state’s insurance issues, and LDI will remain at the service of consumers until rebuilding from Laura, Delta and Zeta is complete.

Anyone with questions or concerns about the claim filing process or how their specific claim is being handled by their insurer can contact the Louisiana Department of Insurance at 1-800-259-5300 or submit a formal complaint at ldi.la.gov/complaints.

View claims data for Hurricanes Laura and Delta here.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.