State Farm Wants Proof of Occupancy for Hurricane-hit Homes in La.

January 9, 2008

State Farm is warning that it will cancel homeowner policies for about 6,000 of its customers in south Louisiana if they aren’t able to demonstrate that their storm-damaged homes are occupied and are being rebuilt.

“Our goal is to work with our homeowners customers that want to stay in Louisiana and rebuild,” State Farm spokesman Gary Stephenson said. “The good news about that is that the large majority of those that have been inspected so far have been found to be in good repair and continue to be insured with State Farm.”

The company began inspections last April of homes and apartments that generated 75,000 claims following hurricanes Katrina and Rita in 2005. The company said it has inspected 50,000 so far in an effort expected to continue through August.

State Farm wants to make sure that people are indeed using their claims checks to rebuild, so that the company isn’t stuck with the extra risk of insuring vacant or poorly maintained homes. Homes that are abandoned are at higher risk for claims because of fires, vagrants, water pipe leaks, theft or vandalism.

“If we find that the property is not occupied and is in significant disrepair, such as part of the roof is missing or windows are gone or there is structural damage, we will send the customer a letter saying that their policy will not be renewed,” Stephenson said.

That letter invites customers to show their State Farm agent a building permit or a signed deal with a contractor with a schedule for repairs that would restore the home or apartment to insurable condition.

“Some have responded to that and given us that plan to repair, so not all of those are going to result in nonrenewals,” Stephenson said.

Information from: The Times-Picayune, www.timespicayune.com

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