Louisiana Bill Would Create Mediation Program for Hurricane Claims
Louisiana policyholders would be able to request mediation with their insurance companies to help resolve disputes over hurricane damages of up to $50,000 under a proposed bill that experts say has drawbacks but could strengthen the claims process.
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Alan Rubin, a principal at Blank Rome LLP and a co-leader of its Severe Weather Emergency Recovery Team, said the bill would benefit both insurance underwriters and consumers at odds over property damage claims. Following hurricanes, he said, parties will often butt heads over whether damage is caused by flooding or high winds.
Such differences could place the responsibility for coverage on either insurance companies or the federal government through the National Flood Insurance Program. That conflict is currently at the heart of a potential billion-dollar dispute over how much State Farm mischaracterized wind damage claims following Hurricane Katrina.
Rubin said Stine's bill could encourage consumers in high-risk areas to find coverage.
"It will cause, quite frankly, more people to want to be insured," Rubin told Law360 on Thursday, adding: "These are the kind of things that are going to make it more tenable, as climate becomes more and more responsible for the way in which we have to live."
But he said the $50,000 property damage limit could be more or less effective depending on a property's value and its location. In areas of Florida, a state to which Rubin has deep ties, that limit would likely not cover the entirety of a claim after a storm.
"If the insurance company loses every argument, and they are deemed incorrect in everything they say, there's only $50,000 — and I say only — there's just $50,000 worth of damages that you can get," Rubin said, noting that would still help Louisianians.
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“Louisiana Bill Would Create Mediation Program for Hurricane Claims,” by Eli Flesch was published in Law360 on March 10, 2022.