Letters: Bills on insurance will shore up market in Louisiana

Homeowners insurance is a growing crisis in Louisiana. 

We know that bad weather is a part of the problem. What may be less obvious, but equally pernicious, is bad laws. In far too many cases, Louisiana has unusual or unique insurance laws that fail to protect our citizens, and have the opposite effect of driving up costs.

The good news is a range of proposed legislation is advancing this session that can bring Louisiana closer to the national norm, creating a more competitive, lower-cost insurance market, while still guarding our residents from bad actors.

One set of bills is Senate Bill 370 and House Bill 611, which would eliminate the “three-year” rule for new policies. The current law prohibits insurance companies from dropping clients after three years. While this seems like good consumer protection on its face, the fact that Louisiana is the only state in America with the rule strongly suggests that it is a bad idea, as existing insurance companies game it (e.g., increasing premiums) and new insurance companies are hesitant to enter the market.

Furthermore, Louisiana’s “bad faith” statute currently lacks clarity for policyholders and insurers, resulting in unnecessary litigation, which ultimately increases costs for everyone. Senate Bill 323 and House Bill 678 would define rights, duties and timelines to ensure swift resolution of claims processes. At the same time, penalties for bad faith would be cut from 200% to 50%, reducing motivation for legal abuse.

Finally, House Bill 120, which extends the Louisiana Fortify Homes Program, would help us help ourselves. The program provides grants of up to $10,000 for homeowners to strengthen their roofs to withstand hurricane winds, providing more safety and lower insurance premiums.

We can only hope for good weather. But this session, we can support better laws that will maintain consumer protection, while increasing competition and lowering costs.

CHRIS KANE

chairman, Greater New Orleans, Inc.