Louisiana insurance regulators should prevent homeowner insurance companies from raising rates and canceling policies so residents hit by hurricanes Katrina and Rita have coverage while they rebuild, an official of the Consumer Federation of America says.
Bob Hunter, a former Texas insurance commissioner and now head of insurance matters with the consumer group, said the moratoriums on canceling policies or changing rates that former Insurance Commissioner Robert Wooley enacted after the storm should have run for at least a year.
Those provisions expired at the end of 2005.
“What you need is a moratorium. You have to stop the insurance companies from terminating business,” Hunter said.
Hunter was the keynote speaker at a seminar on filing hurricane insurance claims in New Orleans on March 30.
Jim Donelon, who took over as insurance commissioner in mid-February after Wooley resigned to practice law, said Hunter’s idea of keeping a moratorium in place was unrealistic.
Louisiana left its insurance moratorium in place longer than Florida did after the disastrous 2004 hurricane season, and longer than Florida and Mississippi did in 2005, Donelon said.
Under a rule now in effect, insurance companies cannot cancel policyholders in Louisiana while they’re repairing their homes, but can change insurance rates through the normal rate-setting process.
Information from: The Times-Picayune, www.timespicayune.com.
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