It’s time for property insurance carriers in Louisiana to readjust | Adams and Reese LLP

After Louisiana citizens endured two consecutive productive hurricane seasons in 2020 and 2021, the state legislature made adjusting property insurance claims a top priority during this year’s ordinary legislative session. On August 1, 2022, two new claims adjuster bills went into effect: Senate Bill 198 and Senate Bill 214. Both bills have the potential to affect the way insurers handle property insurance claims settlement in the state.

Senate Bill 198: Designate an expert as the insured’s “primary point of contact”.

Among other things, Senate Bill 198 created a new law that imposes multiple requirements on insurers when engaging multiple adjusters on a personal home insurance claim after a “named storm or hurricane declared a state of emergency or disaster.” These additional requirements only apply if the insurer changes the adjuster “mainly responsible” for the claim three or more times within a six-month period. In these circumstances, the new law requires the insurer to provide the insured with:

  • A written status report containing relevant information about: (1) the insured’s deductible; (2) the amounts available under each cover; (3) the amounts paid under each cover; (4) when, where and to whom payments were made; and (5) items currently known to the insurer but for which the insured must provide additional information to complete the adjustment process;
  • A primary point of contact until the insurer closes the claim or a party files a complaint against the claim; and
  • Two or more direct means of communication with the primary contact.

The insurer’s designation of an adjuster as the “primary point of contact” for the claim does not prevent other claims professionals from handling any portion of the insured’s claim. Still, it was clear that the legislature’s intent behind Senate Bill 198 was to ensure policyholders had a single point of contact throughout the life of the claim.

Although the new law does not contain a penalty provision, an insured can argue that breaking the law will result in a claim for bad faith practices in the processing and adjustment of the claim. In such cases, it is certainly foreseeable that the plaintiff (the insured) will provide the defendant (the insurer) with information and request the identity of all experts involved in the damage. Therefore, perhaps the best course of action for insurers after a named storm is to have the initial adjuster as the “primary point of contact” for a claim. The primary contact may share details on file from other providers or adjusters, as well as provide contact information for other adjusters.

Senate Bill 214: All adjusters are required to appear and testify in Louisiana in litigation arising out of insurance claims they have settled in that state

Senate Bill 214 changed the procedure for obtaining testimony from non-resident witnesses, creating an exception for non-resident adjusters who settle an insurance claim in Louisiana in two related ways:

  • The new law requires non-resident adjusters to be available for deposition by phone or video conference in actions arising out of the claim they settled in Louisiana, but limits the admissibility of the adjuster’s deposition testimony in court.
  • Accordingly, the new law requires non-resident adjusters to appear in court and testify in the lawsuit.

Senate Bill 214 essentially places an obligation on insurers to make their assigned claims adjusters available to testify in court in Louisiana, regardless of their state of residence. For this reason, insurers should carefully review their processes for assigning adjusters for Louisiana claims and consider the costs associated with selecting non-resident adjusters to process those claims.

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