Louisiana Department of Insurance
MONTHLY REPORT
Volume 12, Issues 8-9
August/September 2012


Members

Commissioner Jim Donelon
Theodore "Ted" Haik, Jr., Chair
Jeff Albright, Vice Chair

Raymond J. Aleman, Sr.
Lee Ann Alexander
J.E. Brignac, Jr.
Paul Buffone
Steve Campbell
Anne Cassity
Sheriff Greg Champagne
Representative Greg Cromer

Manuel DePascual
Michael Guy
Lance "Wes" Hataway
Senator Eric LaFleur
Scott Landry
LTC John A. LeBlanc
Ann Metrailer
Robert Moorman
Senator Dan "Blade" Morrish
Clarissa Preston
Chris Roy, Jr.
Representative Kirk Talbot
Earl Taylor


Staff


Terrell B. Moss, Director

David Evans,
Supervisor/Research Analyst

Katie Walsh, Administrative Assist./Research Analyst

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kwalsh@ldi.la.gov

LDI Press Releases Regarding Hurricane Isaac

Released 8-31-12: Commissioner Donelon Offers Resources for Policyholders Impacted by Hurricane Isaac

As Louisiana homeowners begin to assess the damage caused by Hurricane Isaac, Insurance Commissioner Jim Donelon is offering advice and resources for property owners to assist them in filing a claim and working with insurance adjusters and agents. The Louisiana Department of Insurance (LDI) website includes step-by-step guidance, and the Post Disaster Insurance Guide available there contains information on filing a claim for hurricane damage, minimizing your loss, cleaning up after the storm, things to consider when hiring a contractor, dealing with health insurance, life insurance or business insurance after a storm, and much more. 

“After a disaster, it is important to call your insurance agent or the insurance company’s claims hotline and have your policy number and other relevant information readily available,” said Commissioner Donelon. “Filing a claim for the first time can be a challenging process, so I encourage policyholders who have questions or are in need of assistance to please contact the LDI. That’s why we’re here.” 

Commissioner Donelon noted that while the extent of the flooding is undetermined at this time, it is clear that the flood-related damage will be extensive. “Isaac clearly presents a teaching moment about the necessity of having a flood insurance policy. The National Flood Insurance Program is nearly $18 billion in the red – and that’s largely due to the massive flooding from Hurricanes Katrina and Rita that resulted in about $15 billion in Louisiana flood claims. Louisiana flood insurance policyholders benefit more than any other state by far when it comes to the National Flood Insurance Program.”

Some of the most damaging floods after a hurricane actually occur hundreds of miles from the coast. That was the case in the aftermath of Hurricane Gustav as it flooded hundreds of homes in the Alexandria and Monroe areas as it traveled through our state.

The LDI offers the following tips on filing a claim, understanding hurricane deductibles and hiring a contractor:

Guidance on Filing a Claim
Your policy might require that you make the notification of loss within a certain time frame.  Be sure to keep a record of the conversation with notes on all pertinent information. 

Find out what documents, forms and data you will need to file a claim from your agent.  Provide your insurance company with accurate, detailed information. Incorrect or incomplete information will cause a delay in processing your claim.

Your company will submit a loss form and an adjuster will be assigned to your claim. If you have multiple insurance policies, such as a homeowners policy, a flood policy and a windstorm policy, and aren’t sure which policy to file the claim under, use your best judgment. You may need to file your claim with all three policies. The adjuster will take care of determining which policy covers which part of your loss.

If your home is damaged to the extent that you cannot live there, ask your insurance company if your policy covers additional living expenses. Be sure to give the phone numbers and addresses where you can be reached day or night to your insurance company or agent. 

If you need to make temporary repairs to prevent further damage to your property from the weather or from looting, such as boarding up windows or placing plastic over a leaking roof, keep a list of all work done and save receipts for all materials used. Do not sign any agreements with contractors for repairs until you have spoken with your insurance company.

An insurance company has up to 30 days to pay your claim after you give them satisfactory proof of loss, although sometimes you will receive a check quickly.

Hurricane Deductibles
Commissioner Donelon advises policyholders to review their policies for a hurricane deductible. “This deductible became common on policies following Hurricanes Katrina and Rita. We now have much higher named storm deductibles applicable to our homeowners policies. Deductibles can range from one to 15 percent, but typically run between two and five percent.”

This means, for example, that a homeowner with a $150,000 policy on their structure who has a two percent hurricane deductible would pay $3,000 out of pocket if they sustained roof damage.

“These types of deductible were unusual prior to Katrina and Rita, but are now nearly universal, not only here in Louisiana, but across all coastal states on the Atlantic and Gulf of Mexico,” Donelon added.

Advice on Hiring a Contractor
The LDI offers the following advice regarding hiring a contractor:

  • Most of the time, an insurance company does not recommend a contractor, so be wary of those who claim the insurance company sent them. Always ask to see something in writing.
  • Do not do business with a contractor who cannot show proof of insurance.
  • You can also call your Better Business Bureau to learn if there have been any complaints filed against the contractor
  • Be on the lookout for out-of-state con artists who may have just breezed into town to take advantage of the local situation.
  • Also be wary of contractors who demand payment in full before work is completed.

Consumer Assistance
Consumers can contact the LDI for assistance with their insurance-related questions. They can also call the LDI if they have trouble resolving a dispute with a company or agent (producer), if they need to learn more about an insurance company, or if they want to report suspected insurance fraud. 

The Louisiana Department of Insurance’s toll-free number is 1-800-259-5300. Consumers can find resources online at www.ldi.la.gov, and can also submit questions via email to Isaac@ldi.la.gov.

Released 9-4-12: Commissioner Donelon Issues Emergency Insurance Rule for Policyholders Impacted by Hurricane Isaac

Insurance Commissioner Jim Donelon is announcing the issuance of an emergency rule which allows greater protection and flexibility for policyholders impacted by Hurricane Isaac. The action taken by Commissioner Donelon was authorized by Governor Bobby Jindal’s Executive Order BJ 2012-16, granting the Commissioner temporary authority to implement emergency insurance rules.

“Emergency Rule 26 provides some necessary protections for insured individuals and business owners in Louisiana who are already dealing with the aftermath of Isaac.” said Commissioner Donelon. “For example, the emergency rule will enable policyholders who were displaced by Isaac to have access to the coverages provided by their health policies for emergency treatment, even if they are forced by circumstances to go to an out-of-network provider.”

The emergency rule is similar in scope to the rules issued by the Louisiana Department of Insurance (LDI) following Hurricane Gustav in 2008. Emergency Rule 26 applies to policyholders statewide and to any and all types of insurance. The rule includes the following provisions for the period August 26 until September 25, 2012:
 
• Policyholders affected by Hurricane Isaac will receive an extension of time, until September 25, 2012, to pay insurance premiums due on or after August 26, 2012, without any late fees, penalties, cancellation or non-renewal.
• Louisiana policyholders with health insurance coverage may receive out-of-network medical care; any restrictions that a health plan may place on dispensing of drugs are not applicable and a consumer can receive a 30-day supply of prescription medication without penalty.
• Insurance companies cannot cancel or non-renew any policy of insurance during the time period specified.
• No policy of insurance can be cancelled or non-renewed because of a Hurricane Isaac claim.


Back to School: Insurance 101

As the children head back to school to brush up on their studies, now is an ideal time to brush up on your insurance knowledge and reevaluate your personal insurance needs.  Increased traffic on the roadways, young drivers taking their cars to school for the first time and enforced school zones are factors that may increase the potential threat of an auto accident.  Tropical storms looming in the Gulf may pose a threat to your safety and your property.  In these stressful situations, it is easy to forget even the most basic insurance information.  Here is a list of tips:

Insurance Overview:
Know your insurance policy: Know what is covered, what isn’t and what your deductibles are.  Read through your entire policy. Contact your insurance agent to guide you through it or to clarify any questions you may have.

File claims as soon as possible: Provide your insurance company with complete, correct information. 

Keep copies of all receipts and correspondence regarding the claim.

The 1 2 3’s of Homeowners’ Insurance:
Document your belongings: Make a home inventory checklist and document any belongings of value.

Know your coverage:  Types of coverage included in your homeowners’ policy may consist of coverage for your home and other structures on your property, coverage for increased costs of living while your home is being repaired, coverage for personal possessions and coverage for liability.  You should update your level of coverage accordingly. 

Remember, flood insurance is not covered on your homeowner’s policy!

The A B C’s of Auto Insurance:
Know the basics: The minimum limits for auto insurance in Louisiana are 15/30/25 ($15,000 bodily injury liability maximum for one injured person in an accident/ $30,000 bodily injury liability maximum for all injuries in one accident/ $25,000 property damage liability maximum for one accident).

Collision vs. comprehensive:  Collision insurance covers physical damage to your vehicle as a result of your car colliding with another object (a tree, another car, an object in the road).  Comprehensive coverage pays for losses caused by an event other than collision- flood, hail, broken glass, etc.  Discuss additional optional coverages with your insurance agent.

For additional information, visit the Publications link on the Department of Insurance website: www.ldi.la.gov .

WreckCheck: What to do in the event of an auto accident

Most drivers understandably become shaken in the moments following an automobile accident.  Even the most “insurance-wise” drivers can forget what steps to take after a wreck occurs or have been misinformed about what information to share with the other driver.  Over-sharing of information can lead to identity theft, fraud, and can even put consumers’ property and safety at risk.

As a common rule of thumb, drivers only need to share their name, vehicle insurance information and the phone number and contact information of their insurance provider with each other.  A survey concluded that some drivers believe it is necessary to file a police report only in the incident that someone is injured.  However, filing a police report may actually help facilitate the insurance claims process.

The National Association of Insurance Commissioners (NAIC) has designed a new mobile app called WreckCheck for iPhone and Android smartphones.  According to NAIC, the app outlines what to do immediately following an auto accident and takes users through a step-by-step process to create their own accident report.  It also provides safety tips, captures photos and documents the necessary information to file an insurance claim.

Drivers can visit InsureUOnline.org for additional information about what to do following an auto accident. Also available on the site is a downloadable accident checklist, a video demo, an audio news release, and other materials to help consumers protect themselves after an accident. (Source: NAIC)

IIHS Test Crash Study: Mid-Size Luxury Cars Perform Sub-Par

Eleven mid-size luxury cars were put through a series of test crashes and did not perform well, according to a study released by the Insurance Institute for Highway Safety.  The vehicles, all 2012 models, were put through a series of crash tests which replicated the impact that would happen if the vehicle were to  strike another car or a fixed object.  The test strikes 25 percent of a car’s front end into a five-foot rigid barrier at 40 miles per hour. 

Of the cars tested, the Acura TL, Volvo S60 and Infiniti G were the only vehicles to receive good or acceptable ratings.  Four vehicles earned marginal ratings (the Acura TSX, BMW3 Series, Lincoln MKZ and Volkswagen CC), and four other vehicles scored poorly (Mercedes C-Class, Lexus IS 250, Audi A4 and Lexus ES350).

Additionally, the results concluded that side airbags may not go off on time or extend far enough to protect occupants.  Seat belts that spooled out following the simulated crash seemed to pose a problem for the BMW, Mercedes and Volkswagen. 
Frontal crashes kill more than 10,000 motorists each year.  Continued safety tests such as this one could potentially save thousands of lives. 

LDI Helps Recover an Additional $2.6 Million in Insurance Claims Payments

The Louisiana Department of Insurance (LDI) has worked with insurance companies and consumers to recover additional funds to consumers from their insurance providers over the first six months of the year.  The funds were recovered from formal complaints regarding property and casualty, health insurance, life and annuities, and consumer advocacy claims. 

Breakdown of Consumer Insurance Dispute Settlements (January 1-June 30, 2012)
Division/Office

Inquiries

Complaints Filed

Funds Recovered

Division of Life & Annuity

4593

238

$993,290.10

Office of Property & Casualty

1853

782

$1,090,523.89

Office of Health

435

456

$582,700.15

Office of Consumer Advocacy

54

9

$6,652.37

Total

6935

1485

$2,673,166.51

“Many people may not realize that the knowledgeable staff at the LDI can help you determine when to file a complaint against a company, or help you resolve disputes with insurers,” said Insurance Commissioner Jim Donelon. “I encourage folks to continue to reach out to us for assistance in determining what options are available to them when they are unsatisfied with the resolution of a claim.”