Louisiana Implements Mediation Program for Hurricane Ida Claims

October 18, 2021

Louisiana has established a voluntary mediation program for the purpose of resolving property/casualty insurance claim disputes related to damage caused by Hurricane Ida, which struck Southeast Louisiana as a category 4 hurricane in late August.

Bulletin 2021-08 states its purpose “is to establish a voluntary mediation program for all authorized property and casualty insurers and surplus lines insurers (hereinafter ‘insurers’) and their policyholders.”

The program is intended for mediation of residential property insurance claims disputes of up to $50,000. It begins Oct. 18, 2021, and expires June 30, 2022, unless terminated at an earlier date by the insurance commissioner.

The Louisiana Department of Insurance noted that the success of a similar, mandatory, program established following the 2005 Hurricanes Katrina and Hurricane Rita prompted the creation of the voluntary mediation program for Hurricane Ida. There were approximately 12,000 mediations conducted under Emergency Rule 22 in the aftermath of Katrina and Rita and the success rate was very high, the department said.

The LDI said given the success rate of the Katrina/Rita program, it “is optimistic that a similar mediation program, to be known as the ‘Hurricane Ida Mediation Program’ (the Program), could yield similar success.”

The bulletin states that “either the insurer or the policyholder may make a written offer to the other party to engage in voluntary mediation under the Program. The other party may accept or reject the offer of mediation.” It requires that all parties that agree to mediation must negotiate in good faith.

If mediation is agreed upon, insurers may choose between two firms that have been selected to conduct the mediations: Mediation & Arbitration Professional Systems [https://map-adr.com (504)831-2141] or Perry Dampf Dispute Solutions [https://www.perrydampf.com/ (225)389-9899].

Under other provisions of the program:

  • Insurers must “disburse the specific dollar amount agreed to by both parties to the policyholder within ten (10) business days of the conclusion of the mediation.”
  • The cost of the mediation is $600.00 to be paid by the insurance company.
  • The actual mediation session can last up to 90 minutes. That time does not include “telephone calls, document review, research, or any other administrative tasks.”
  • If only a partial agreement as a result of the voluntary mediation program, the parties may continue the mediation “but will be responsible for any additional mediation expenses at the mediator’s standard rate.”
Lyndell Scott walks past the debris of his gutted home in the aftermath of Hurricane Ida in LaPlace, La., Friday, Sept. 10, 2021. (AP Photo/Gerald Herbert)

Hurricane Ida is the costliest natural disaster in 2021 in the U.S. so far — with costs exceeding $60 billion — and will be ranked among the top five most costly hurricanes on record (since 1980) for the country. Ida’s total cost will likely increase further, according to a report from the NOAA National Centers for Environmental Information.

“I urge and request that all insurers and policyholders utilize this voluntary mediation program to resolve their dispute on personal lines residential property insurance claims associated with damage caused by Hurricane Ida,” Louisiana Insurance Commissioner Jim Donelon stated in the bulletin.”

Topics Catastrophe Natural Disasters Claims Louisiana Hurricane

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