Deadlines to file proof of loss for hurricane claims fast approaching
The following was released to us by the Louisiana Department of Insurance:
BATON ROUGE, La. - Louisiana Insurance Commissioner Jim Donelon urged all property and casualty insurers to grant deadline extensions to property insurance policyholders who are still struggling with their insurance claims from the historic 2020 storm season.
In Bulletin 2021-02 released Thursday, Commissioner Donelon urged insurers to give policyholders time beyond the approaching 180-day deadlines to demonstrate damage to their properties from last year’s record hurricane season. Policyholders are required to file a proof of loss that they suffered losses as a result of last year’s hurricanes, and the deadlines for hurricanes Laura, Delta and Zeta are rapidly approaching. February 23 is the 180th day after Hurricane Laura, but mandatory evacuations may have extended those deadlines.
Commissioner Donelon further provided guidance in Bulletin 2021-02 about replacement cost coverage and reminded insurers that Louisiana’s “three-year homeowners protection law” (codified in La R.S. 22:1333 and La R.S. 22:1265) limits cancellations and non-renewals.
“Although I encourage policyholders to file their claims with their insurers as soon as possible to begin the recovery process, I know the level of damage caused by the 2020 hurricanes makes it very difficult for people to gather all of the information and documentation they need to file a detailed proof of loss to support their claim,” said Commissioner Donelon. “I am requesting that insurers take into account the negative impact that multiple hurricanes within a short period of time have had on policyholders in their efforts to repair their property and lives and to show some mercy.”
Even as Commissioner Donelon urged insurance companies to work with policyholders, he encouraged consumers to be aware of the deadlines and strive to meet them. Bulletin 2021-02 is ultimately a request for leniency, and the legal deadlines still stand.
Policyholders need to be aware of deadlines associated with their policies and work to keep insurance companies aware of any issues such as material shortages, cost increases or difficulty finding a contractor that would make it harder to complete repairs on time. Often a simple email to the insurance carrier letting them know of issues and asking for a specific extension may result in more time to complete repairs. Your insurer must respond to all inquiries within 14 days of such a request. Property owners should also be aware of the Policyholder Bill of Rights (La R.S. 22:41), which was enacted after hurricanes Rita and Katrina.
The three-year homeowners protection law
Louisiana has laws – originally sponsored by former Senator Jim Cox of the Lake Charles area in 1992 – that limit the circumstances under which an insurer can cancel or non-renew a homeowners policy once they’ve had coverage for three years. Those laws (La R.S. 22:1265 and La R.S. 22:1333) say that property insurers can’t cancel or non-renew a customer whose policy has been on the books for more than three years unless they don’t pay their premium, they commit fraud, they file two or more non-Act of God claims within three years, there is a “material change in risk” of the insured property, or the insurer is at risk of becoming insolvent.
In his bulletin, Commissioner Donelon also reminded insurers that they can’t cancel or non-renew homeowner policies older than three years for “material change in risk” while they are attempting to rebuild from a hurricane within a year of the loss (sometimes longer). He told insurers that he would use “the full extent” of his regulatory enforcement authority to protect homeowners if he learns that insurers are trying to drop people.
The major deadlines facing consumers are as follows:
Proof of Loss Deadlines
Louisiana law (La R.S. 22:1264(A)) states that when a catastrophic event occurs and civil officials declare a state of disaster or emergency pursuant to law, owners of property within the declaration area shall have not less than 180 days from the date of the event to submit a proof of loss with their insurer.
Approximate proof of loss filing deadlines are as follows:
|Event - Date||180-Day Deadline|
|Laura - August 27||February 23, 2021|
|Delta - October 9||April 7, 2021|
|Zeta - October 28||April 26, 2021|
Policyholders who need to file a proof of loss should review their policy and contact their agent, insurer or adjuster for guidance on the exact deadline per their policy. If policyholders were denied access to their properties by civil authorities during a state of disaster or emergency, they might have a few more days to file in a timely fashion.
Agents, adjusters and insurers also can advise what documentation will fulfill a policyholder’s proof of loss obligation. A sufficient proof of loss could include the initial damage claim, as well as photos, contractor estimates, receipts for temporary repairs and any other documentation required by the company.
Replacement Coverage reimburses policyholders for the cost of repairing a structure or replacing an item without deducting for depreciation. For example, if your ten-year-old roof was damaged, the insurer will ultimately pay you the full cost to replace the roof rather than deducting for a decade of wear and tear. Likewise, if the current cost of a television similar to the one you bought seven years ago is $2,000, you will receive the full $2,000. Many insurers start by paying policyholders the actual cash value, or depreciated value, of an item or building component, and then reimburse policyholders for the full amount when they repair the damage or replace the item. Policies often require you to actually replace the item and submit documentation in order to receive reimbursement.
If you have a replacement cost policy on your home, you have one year from the date of the loss or receiving a claim payment, whichever is later, to file additional documentation after a catastrophe to receive reimbursement (La R.S. 22:1264(B)). You can turn in receipts for replaced items that were previously reimbursed at actual cash value to collect the full replacement cost value if your policy allows for it.
If you are unable to come to an agreement on your claim with your insurance company, you have the right to file a lawsuit. That period is limited to 24 months after the date of loss (La R.S. 22:868), so you must file suit before the final deadline for any matters still in dispute with your insurer.
The Louisiana Department of Insurance stands ready to assist anyone affected by the 2020 storms with their hurricane claims. If your insurer attempts to non-renew your coverage while you are rebuilding, or if you have questions or concerns about the claim filing process or how your specific claim is being handled, contact the Louisiana Department of Insurance at 1-800-259-5300 or submit a formal complaint at ldi.la.gov/complaints.
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