Basics of Hurricane Claims
Mr. Donelon’s position of State Insurance Commissioner is a Constitutionally-created, statewide elected official charged with regulating the insurance industry within the state of Louisiana. His first responsibility is to protect consumers.
Mr. Donelon first explains that insurance companies place a 2%, 3%, or %5 named storm deductible. A named storm deductible is a type of deductible that goes into effect under one or all of three conditions: wind/hail, storm, or hurricane. For example, Hurricane Issac covered all three conditions. Moreover, it is important to note that a named storm deductible is NOT a percentage of your claim but a percentage of your insured value. For example, most people are covered up to $200,000. A standard 3% deductible would mean that an individual will need to pay $6,000 out-of-pocket. Furthermore, there is one and only one named storm deductible per hurricane season for the state of Louisiana.
Mr. Donelon then points out that Louisiana state law is the only state in the Union to have the most important homeowner’s consumer protection statute. If one enters into a contract with an insurance company for three or more years and has had no more than two non-act of God claims within those three years, the insurance company cannot change the deductible, cannot change the premium, and cannot refuse to renew the policy to the consumer as an individual.
Before the traditional Q&A session, Mr. Donelon encourages all citizens of the state of Louisiana to obtain both flood and homeowner’s insurance. Flood insurance is not a flat-fee but based on one’s location. Furthermore, John advocates that individuals should purchase enough flood insurance to cover not only their entire property but also their belongings.
Ava in River Ridge writes in via e-mail: “What does President Obama’s Flood Insurance Reform Bill do and when does it go into effect?”
Mr. Donelon explains that the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 is currently in effect. This law extends the National Flood Insurance Program (NFIP) for five years and makes several reforms. One of the reforms is that the NFIP may only increase annual premiums by twenty percent. Two factors that determine the premium are elevation and certification of levees.
Jessica (@JessicaHackett) writes on Twitter: “What is the Mold Exclusion?”
There is no mold exclusion clause. However, there is a cap on mold remediation, meaning that an insurance company will pay only a certain amount of money to restore damage caused by mold. This cap excludes mold caused by a flood damage, as homeowner’s insurance excludes flood damage. Instead, this cap includes mold caused by a ruptured pipe or leaky roof. John suggests that the right of a homeowner to have restitution for damages due to mold caused by flooding can be litigated if the insurance company has not properly paid to restore the house. Last, Mr. Donelon explains the new prescriptive period, the amount of time that an individual is allowed to take legal action against another individual or private company, is now two years. As he claims, ‘You (the consumer) have the right to made whole again.”
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