Homeowners in Louisiana parishes hardest hit by hurricanes deserve a break from the artificially inflated property insurance rates charged by the state-backed insurance company, the House voted June 4.
The bill by Rep. Jean-Paul Morrell seeks to ease the burden of homeowners along the coast for whom only one company will write an insurance policy: Louisiana Citizens Property Insurance Corp., the state “insurer of last resort.”
By law, Citizens must charge 10 percent more than the average charged by private firms inside a parish – a provision that Morrell wants removed for parishes where few private firms are writing policies.
Morrell said he wasn’t sure how many parishes fall into that category, but he said he was certain that Citizens’ artificially high rates were dampening the hurricane recovery for Orleans, St. Bernard and Plaquemines parishes.
“It’s stifling development in all areas if you can’t afford insurance,” said Morrell, D-New Orleans.
The House voted 83-15 to approve the measure and send it to the Senate.
If enacted, the provisions in Morrell’s bill would expire in 2010. The legislation would call on the state Department of Insurance to analyze markets in which Citizens writes more than 50 percent of policies. The department would then have the power to allow the company to eliminate the 10-percent markup in those parishes.
Opposed to the measure are the insurance department’s chief, Insurance Commissioner Jim Donelon, and private insurance companies.
Donelon has said the long-term effect of the plan would be to worsen Louisiana’s property insurance crisis by reducing competition, raising rates and deepening state government’s involvement in the insurance business. He said the plan also would increase the number of Louisiana homeowners forced to go to Citizens for insurance, because fewer private insurers would be willing to write policies in south Louisiana.
House Bill 962 can be viewed at http://legis.state.la.us/
Topics Louisiana
Was this article valuable?
Here are more articles you may enjoy.
All in the Family: Husband, Wife and Daughter Indicted for Insurance Fraud and Bribery 
Oaktree’s Deal to Buy A-Cap Insurer Crumbles, Spawning New Talks 
Isaias: 47,000 Claims and $582M in Losses in Florida So Far, OIR Reports 
Florida AG Says His Office Investigating ‘Anti-Public Adjuster’ Endorsements in Policies 
