Two House bills dealing with the handling of homeowner insurance claims following major disasters were approved by the Senate Insurance Committee Wednesday and move to the full Senate for debate and final action.
Rep. Gabe Firment, R-Pollock, an insurance adjuster for over 20 years, is sponsor of both measures. House Bill 457 provides for certain standards of conduct for claims adjusters. HB 591outlines what are considered best claims settlement practices. Both bills received unanimous support in the House.
Hurricanes Laura and Delta devastated Southwest Louisiana, and Firment said north central Louisiana was also hit hard. He said those hurricanes caused destruction from Cameron Parish to Ouachita Parish.
“If (insurance) companies were doing the right thing, I wouldn’t be doing this,” Firment said of his legislation. He added that putting the owner back to where he was is not happening. He said roofs, for example, shouldn’t be spot repaired and insurers should pay to replace the whole roof.
The claims adjuster measure by Firment repeals nine provisions in current law and adds 19 standards of conduct. Adjusters shouldn’t have any direct or indirect financial interest in any aspect of the claim, can’t recommend employment of attorneys or contractors and can’t accept any compensation from either group.
Adjusters should make truthful and unbiased reports of the facts, report violations of the Insurance Code and exercise care when dealing with elderly claimants. And whenever applying for a license or renewal, the claims adjusters should read and acknowledge the claims adjuster standards of conduct.
Firment said over the years and after recent hurricanes he has seen insurance companies and adjusters that weren’t taking care of business. He added that it is critical for the state commissioner of insurance to enforce the state’s insurance laws by holding companies and adjusters accountable with fines and other measures.
Some engineers and building consultants are beginning to play active roles in handling claims, which Firment said is causing some problems.
HB 591 tackles the issue of depreciation, which confuses many property owners. The legislation says insured individuals should be notified that depreciation is being applied, and the insurance company shall provide a written explanation as to how it was calculated.
Firment said some adjusters don’t know how to handle depreciation, and his legislation removes the ambiquity (uncertainty) of the process.
The legislation says insurance companies shouldn’t require that repairs, replacement, restoration or remediation be made to a homeowner’s property by a particular vendor or contractor.
When settling a claim, insurance companies are required to include the general contractor’s overhead and profit. And when replacing items, the insurance company shall replace all of them to conform to a reasonably uniform appearance.
The bill also provides for a mediation process if the insurance company and the home or business owner disagree on the amount of a loss.