Louisiana Senate Bill SB595

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 4/21/10
• Engrossed: 4/26/10
• Refer: 4/27/10
• Report Pass: 5/25/10
• Enrolled: 6/17/10
• Chaptered: 7/8/10
• Passed: 7/8/10

Caption

Prohibits failure to renew or cancellation of certain homeowners' insurance policies due to presence of Chinese drywall. (gov sig)

Impact

The impact of SB595 on state laws is significant as it introduces a specific regulation concerning the conduct of insurers in relation to property insurance. It establishes that any homeowners negatively affected by the use of Chinese drywall cannot have their insurance canceled or not renewed based solely on this factor. This provision is particularly important for homeowners who may have previously filed claims linked to Chinese drywall, ensuring they are not disproportionately punished by the insurance system for issues beyond their control. Additionally, it mandates reinstatement of policies under certain conditions, affirming homeowners' rights in this context.

Summary

Senate Bill 595 aims to address issues related to homeowners' insurance policies affected by the presence of Chinese drywall, a building material imported from China known for causing various health and structural problems. The bill explicitly prohibits insurance companies from canceling or refusing to renew homeowners' insurance policies solely based on the presence of this drywall, even if the policy has been in effect for a short period. By preventing insurers from penalizing homeowners for a condition related to the materials used in their properties, the bill seeks to provide protection for affected homeowners who may face financial risks due to canceled coverage.

Sentiment

The sentiment surrounding SB595 appears to be supportive among advocates for homeowners' rights and consumer protection. Proponents argue that the bill establishes necessary safeguards for homeowners who are often left vulnerable in the face of regulatory oversights or unfair insurance practices. However, some insurers may view the legislation as an unwelcome constraint on their ability to manage risk, potentially leading to increased premiums or tougher underwriting standards. The discourse around the bill reflects a tension between protecting homeowners and the operational flexibility desired by insurance providers.

Contention

Notable points of contention include the implications of preventing insurers from acting on the basis of prior claims related to Chinese drywall. Critics may argue that such regulations could encourage lax practices within the insurance industry, disincentivizing thorough risk assessments. Insurers may express concerns about the financial impacts of reinstating policies for homeowners who have made claims due to unique risks associated with Chinese drywall. Ultimately, the bill highlights a broader debate over the balance between consumer rights and the business interests of insurance companies.