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Donelon gets complaints about adjusters not showing up to do inspections, etc.

Hurricane Ida hit southeast Louisiana on August 29
Published: Sep. 22, 2021 at 6:55 PM CDT
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Damage from Hurricane Ida in Louisiana
Damage from Hurricane Ida in Louisiana(Briana Kent)

NEW ORLEANS (WVUE) - Weeks after Hurricane Ida caused catastrophic damage in southeast Louisiana, some property owners are not satisfied with the response from their insurers.

Insurance Commissioner Jim Donelon says he is receiving complaints.

“What I’m hearing a lot about in the form of complaints is promises not being fulfilled for visitation, inspection, etc., and so that is a focus of mine at this time and will continue to be,” said Donelon.

Dan Burghardt is a veteran insurance agent and owner of Burghardt Insurance.

“The problem is you’ve got an adjuster shortage right now, we’ve got multiple natural disasters going on across the country,” said Burghardt.

Donelon says he has taken steps to get more insurance adjusters on the ground in Louisiana.

“I have authorized or licensed 7,000, over 7,000 new adjusters to do business in our state. When a catastrophe is declared I have the authority under our licensing law, we’re one of half the states that license adjusters,” said Donelon.

FOX 8 asked Donelon what is a reasonable length of time for adjusters to get to the damaged property.

“Reasonable from my perspective is 30 days to inspect; the law gives them in a catastrophe, I have the authority and have always for every hurricane, extended it from 30 to 60 that they have to contact their policyholder and do the initial contact. They’re all doing that, that’s done over the phone or by email,” said Donelon.

Burghardt commented further on the issue.

“It’s been extended to 60 for obvious reasons, it’s plenty of claims and not enough adjusters to go around,” he said.

A year after Hurricanes Laura and Delta which caused significant damage in southwest Louisiana, some homeowners have complained to members of Congress that they did have not received payments for claims.

Donelon does not think that will be the case with Ida victims.

“I don’t think so, but there’s always disagreement. We have partnered with the National Association of Insurance Commissioners to do what’s called quarterly data calls and the NAIC has agreed to start doing it for Ida at the end of this year, the end of December,” he said.

He said some unpaid claims are related to hurricane deductibles.

“The companies report as of June 30 that they have closed 92% of their 315,000 claims, 62% were closed with payments. That other 30% between the 62% that got payment and the 92% that were closed without payment is really taken up by folks who didn’t get more damage like myself for my Zeta damage that didn’t exceed the named storm or hurricane deductible,” said Donelon.

Deductibles are higher for hurricanes after Hurricane Katrina which made landfall in 2005.

“It’s a sticker shock but you know the insurance industry tries to at least maintain a financial status and having these deductibles, having them to 2% to 5% allows insurance companies to continue insuring homes along the gulf coast. I mean we’re in hurricane alley,” said Burghardt.

Donelon stressed that insurance companies cannot drop policyholders just because they must pay a claim for hurricane damage.

“So important, the answer is an unequivocal, absolutely no. For a homeowner’s policy in our state, a claim for an act of God loss cannot be used to cancel you, to increase your premium, or to change your coverage, like your deductible,” Donelon said.

And he has ways to go after companies that do not live up to their obligations to policyholders.

Donelon’s staff says if an insurer fails to initiate loss adjustment within 60 days of receiving the claim, Donelon can refuse to renew, suspend, or revoke their license or he can fine them $1,000 per violation up to $100,000. And if an insurer fails to pay the claim within 30 days of being given satisfactory proof of loss, Commissioner Donelon can refuse to renew, suspend, or revoke their license or he can fine them $1,000 per violation up to $100,000. And the policyholder also has a private right of action for a penalty of 50% of the damage from the undisputed portion of the claim, or $1,000, whichever is greater under Louisiana law.

RELATED STORIES:

Storm victims keeping insurers busy; FEMA addresses confusion over denials

Donelon orders insurance companies to pay evacuation expenses for Ida

Insurance cancellations, non-renewals suspended in Ida-affected parishes

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