Louisiana House Bill HCR199

Louisiana 2014 Regular Session

• Introduced: 5/27/14
• Engrossed: 5/30/14
• Refer: 6/1/14
• Passed: 6/4/14

Caption

Requests the Louisiana Department of Insurance to study prohibiting insurers from using claims that did not exceed the insured's deductible to cancel coverage

Impact

The proposed study will examine the statutory language and practices surrounding homeowner's insurance claims, particularly focusing on the criteria that insurers use to cancel policies or raise deductibles. A determination that insurers can use minor claims negatively impacts insured homeowners by making them wary of filing legitimate claims, as they could face retaliation in the form of increased premiums or policy cancellations without having received reimbursement for their claims.

Summary

House Concurrent Resolution 199 (HCR199) calls for a study by the Louisiana Department of Insurance regarding the implications of insurance companies using claims that do not exceed an insured's deductible as grounds for canceling or increasing the deductible of a homeowner's policy. Specifically, the resolution aims to clarify whether current Louisiana law, R.S. 22:1265, allows insurers to consider such claims and to explore potential amendments to ensure fair practices in insurance coverage decisions.

Sentiment

The sentiment around HCR199 appears to be supportive among legislators who recognize the right of homeowners to seek insurance coverage without fear of punitive actions for filing claims. There was a unanimous vote (91-0) in the House in favor of the resolution, indicating strong bipartisan support to address the potential ambiguity in the law. However, there may be concerns from the insurance industry about the implications of restricting their ability to manage risk through the analysis of claims.

Contention

One notable point of contention is whether insurers should be allowed to consider claims that were never paid out—which do not involve any actual reimbursement to the insured—as a valid basis for unfavorable actions on homeowner's policies. The outcomes of this study could lead to significant changes in how insurance claims are processed and the associated consumer protections, providing clarity on the definitions involved while balancing the concerns of insurers regarding financial sustainability.