In response to many concerned Louisiana policyholders and advocates, the Louisiana Department of Insurance (LDI) issued Bulletin 2021-03 to all authorized (admitted) and approved unauthorized (surplus lines) insurers who provide coverage for Louisiana policyholders’ damages as a result of the catastrophic events of 2020.1
Commissioner Donelon begins by stating the purpose of the bulletin:
The purpose of Bulletin 2021-03 is to remind insurers of their good faith claims settlement and policyholder service obligations as policyholders continue to struggle with securing estimates and other relevant information in the wake of Hurricane Laura and the aftermath of the recent winter storm.
Commissioner Donelon addressed the recent concerns of policyholders who have not been able to get responses from their insurers or access information to which they are entitled:
It has been brought to my attention that some insurers are resisting requests from policyholders to obtain a complete copy of their policy. Insurers are reminded that La. R.S. 22:41 entitles a policyholder to receive a duplicate or replacement copy of their complete policy. To that end, insurers should make efforts to expeditiously comply with any policyholder requests for copies of their policy.
It has also been brought to my attention that some insurers are refusing to communicate with their policyholders if the policyholder has hired a public adjuster. This is not allowed. Insurers must always maintain an open line of communication with their policyholders, and the presence of a public adjuster is irrelevant to that obligation.
Also addressed in Bulletin 2021-03 is the upcoming expiration of the statutory catastrophe extension of the proof of loss deadline:
This statutory extension of the proof of loss deadline does not relieve insureds of their obligation to cooperate with their insurer and to continue advancing their claim by providing documentation requested by the insurer. By the same token, the insurer is not relieved of its good faith obligation to continue working with the insured in evaluating claims beyond the proof of loss deadline, particularly in light of the shortage of contractors and the delays experienced by many insureds in obtaining damage estimates for their property.
To accomplish these efforts, insurers are encouraged to work with their policyholders, as I requested in Bulletin 2021-02. Louisiana policyholders have faced, and continue to face, unprecedented challenges in the recovery process. Not only were these policyholders impacted by multiple hurricanes, but they were already dealing with the challenges of COVID-19 and then recently suffered greatly from the recent winter storm.
As a result of those challenges, I would expect insurers to act reasonably in enforcing their proof of loss requirements, and I would expect policyholders to exert their best efforts to comply with those requirements in a timely manner.
In sum, LDI Bulletin 2021-03 reminds, cautions, and encourages Louisiana insurers regarding the following concerns of Louisiana policyholders:
Bulletin 2021-03 reminds these insurers that they must act in good faith and fair dealing with their policyholders regarding the entire claims process, including the adjustments of the claim, initial proof of loss submittals, supplemental proof of loss submittals, and initial and supplemental claims for damages to covered properties caused by any of these multiple catastrophic events. Additionally, Bulletin 2021-03 cautions these insurers of the provisions of the unfair trade practices set forth in La. R.S. 22:1964(14), which should guide these insurers in the claims process. Lastly, Bulletin 2021-03 reminds insurers of an insured’s right to request and receive a complete copy of the policy in accordance with the Policyholder Bill of Rights.
We are pleased that LDI and Commissioner Donelon have made the department and himself accessible and attentive to Louisiana policyholders and advocates. However, some insurers will likely need more than reminders, cautions, and encouragement to treat their policyholders fairly and adjust their claims in good faith. We join Commissioner Donelon in encouraging Louisiana insurers to review the above referenced statutes. We also encourage Louisiana policyholders to document their recovery efforts, communication attempts with their insurers, including any requests for extensions of policy deadlines, and responses from their insurers as they navigate through these unprecedented times. And as a reminder, we, too, are accessible and attentive—feel free to give us a call.
1 Bulletin 2021-03, Good Faith Claim Settlement Practices and Policyholder Service Obligations, James J. Donelon, Commissioner of Insurance, February 26. 2021.