Louisiana Department of Insurance Office of Consumer Advocay
Volume 3, Issue 2
FEBRUARY 2012

Natchitoches Lions Club Meeting
2/6/2012
Natchitoches Regional Medical Center Community Room
501 Keyser Avenue
Natchitoches, La

2012 Ethics Seminar Insurance Professionals of Shreveport/Bossier
2/9/2012
East Ridge Country Club
100 Stewart Street
Shreveport, LA

Assumption Council on Aging
2/10/2012
166 Hwy 1008
Napoleonville, LA

Cameron Council on Aging
2/20/2012
965 Highway 384
Lake Charles, LA

 

For speaking engagements scheduled after the release of the newsletter or for more detailed information about engagements listed in the newsletter, visit our Web site at www.ldi.la.gov. Click on the Events tab found in the center of the home page.

To view previous newsletters, click on Consumer Advocacy under Consumers; then click on Consumer Advocacy Newsletters.

To find out if Consumer Advocacy will be in your area or to request a speaker for your organization or group, call (225) 219-0619 or e-mail
consumeradvocacy@ldi.la.gov

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Uninsured/Underinsured Motorist Coverage

Louisiana Revised Statute 32:900 requires an automobile owner to carry the minimum 15/30/25 liability auto insurance limits to operate a motor vehicle. However, many drivers do not purchase a liability policy or they purchase only the state minimum requirement. Bodily injury and vehicle repair costs may exceed these minimum limits.  Recently, the Insurance Research Council found that ten percent of Louisiana drivers are driving without liability insurance. As a result it may be wise to purchase Uninsured/Underinsured Motorist coverage (UM/UIM).

UM coverage is an additional coverage you can purchase  that compensates you for damages  you may receive when you are involved in an accident with an uninsured driver or when you are struck by a hit-and-run driver.  UIM covers you  for damages that exceed the policy limits carried by the other driver who has liability coverage.

Louisiana statute 22:1295 and Louisiana Department of Insurance (LDI) Bulletin 08-02 state that  an insured’s automobile liability insurance policy will include uninsured/underinsured motorist bodily injury coverage at the same limits as the bodily injury liability coverage in the policy unless the insured properly completes and signs a form prescribed by the Commissioner of Insurance rejecting, selecting lower limits or selecting economic-only coverage.

Consider adding UM/UIM coverage protection to your automobile policy.  It could pay your medical bills, lost wages and pain and suffering if you are involved in an accident with an uninsured or underinsured driver.   Please contact your insurance producer or company for more information about these important coverage options.

Dwelling vs. Homeowners Insurance

Sometimes homeowners purchase a dwelling policy thinking it is a homeowners policy; then, when something happens to their home, they wonder why the loss isn’t covered by their policy. Unfortunately, this is not the time to find out what coverages are in your policy.  A dwelling policy by its very nature covers the dwelling, the four walls of a structure.  In its most basic form, a dwelling policy does not cover the home’s contents, provide liability coverage or respond to theft losses.  However, these coverages may be purchased by endorsement.

The first thing to consider when purchasing a dwelling policy instead of a homeowners policy is a dwelling policy does not cover the contents of your dwelling.  Personal items, such as furniture, jewelry and clothing, inside your home that are not attached to the physical structure are considered contents. 

The second thing to consider when purchasing a basic dwelling policy is the lack of liability coverage.   Unfortunately, many people overlook the benefits of having liability coverage for injuries or damage that may take place on or result from your property.  For example, if you are trimming a tree on your property and a branch falls and damages your neighbor’s house, under a dwelling policy, no coverage would be afforded for the damage even though you are legally liable for it. 

A dwelling policy is purchased for a home that is owned but not owner occupied.  If someone were to move to an apartment, condominium, senior community or other residence, then rent out the home or allow relatives to live in it, the home will no longer be eligible for homeowners insurance.  By having a basic dwelling policy, the structure will be covered Tenants are responsible for their personal property and would have to purchase a tenants policy to insure their property.

A dwelling policy may be purchased if a home is old or does not meet the minimum underwriting guidelines of a homeowners company that requires updated plumbing and electrical wiring. Also, if you have an unacceptable loss history, many insurance companies may refuse to issue you a homeowners policy and may instead offer you dwelling-only coverage.

There are stark differences between a dwelling policy and a homeowners policy.  Before buying coverage on your home, please be aware of what each policy offers. Also, be sure to shop around for the coverage and price that best suits your needs. 

Louisiana Citizens Property Insurance Corporation Depopulation Process

Louisiana Citizens Property Insurance Corporation (Citizens), a non-profit insurance corporation, was designed to insure homes and commercial properties in Louisiana that the private insurance market would not insure.  Citizens is commonly referred to as the “insurer of last resort."  It is state mandated that premiums are more costly than policies purchased through the private insurance market.

After Hurricanes Katrina and Rita in 2005, Citizens' policy count spiked to 174,000 because insurance companies were no longer writing new business in the state. During the 2007 Regular Legislative Session, the Louisiana Legislature passed legislation, Act 447, in an effort to reduce (depopulate) the number of Citizens' policies.

This Act allows Citizens to transfer policies back to the private insurance market. This reduction in policies benefits property owners by preventing or reducing future assessments that could be charged to Louisiana property insurance consumers in the event of another catastrophic event.  For the policyholders, policies taken out of Citizens and written in the private insurance market will be written at lower premiums, and insurance companies can increase their book of business and accept the risk at a time of their choosing.

The depopulation process requires that the private insurer secure approval from the producer to assume the business. Any policyholder wishing to “opt out” of the assumption and remain with Citizens is given a deadline by the Louisiana Citizens Property Insurance Corporation.

   
Since 2008, Louisiana Citizens has had five rounds of depopulation resulting in the removal of 67,000 policies. On December 1, 2011, during Round 5 of the depopulation process, five companies, Occidental, Lighthouse, Capitol Preferred, Access Home and Centauri Specialty, successfully made offers to write homeowners policies previously written by Citizens. Altogether, 31,458 unique policies were requested by these companies, and 10,890 policies were authorized to be moved.

If you would like more information regarding this depopulation process, contact your insurance producer or Louisiana Citizens Property Insurance Corporation, Customer Service at 1-888-568-6455.

It Pays To Know Your "Stuff"

Whether it’s gourmet cooking, designer handbags or high-end electronics, the investment Americans make in personal passions can have a profound impact on insurance needs.

According to research, 48 percent of consumers do not have an inventory of their possessions. And of those who do, 32 percent have no photos and 58 percent have no receipts. Creating a simple home inventory helps you track exactly what you own and what it is worth, making important insurance decisions easier.

How to create a home inventory

  • To begin your list, consider purchases such as jewelry and fine art, or family heirlooms or other collections. Also consider items related to everyday leisure time, from flat-screen televisions to custom-made guitars.
  • Don’t forget items you use rarely such as holiday decorations, sports equipment, etc.
  • Pull together copies of original sales receipts and/or appraisal documents. Also note model and serial numbers.
  • Group your possessions into logical categories, e.g., by hobby, by room in your home, etc.
  • Store your home inventory and related documents in a safe, easily accessible place online, on your computer or in a fire-proof box or safe deposit box. Consider sharing a copy with friends, relatives and your insurance provider.
    • iPhone® users — NAIC’s free myHOME Scr.APP.book downloadable app lets you quickly photograph and capture descriptions of your possessions room by room, then store electronically for safekeeping. View video demo.
    • Android® users — With the myHOME Scr.APP.book home inventory app you can quickly capture images, descriptions, and serial numbers of your possessions then organize the information by room or by category. The app even creates a back-up file for e-mail sharing. View video demo

A home inventory can be invaluable when deciding how much insurance coverage fits your life situation and to make sure you are adequately protected should you need to file a claim.

Taken from www.insurance.insureuonline.org - National Association of Insurance Commissioners – “Insure U – Get Smart About Insurance”

 
Office of Consumer AdvocacyP.O. Box 94214Baton Rouge, LA 70804-9214
(225) 219-0619 or (800)259-5300www.ldi.la.govconsumeradvocacy@ldi.la.gov