A bill in the Louisiana Legislature that clamps down oninsurers' ability to reject home and business property claimsshould win passage by Friday, its sponsor said today.

The prediction came from Sen. Julie Quinn, a Republican from theNew Orleans suburb of Metairie, whose measure is being fought bythe Property Casualty Insurers Association of America.

PCI argues the legislation would saddle insurers with “billions”in claim costs by making it more difficult to deny home andbusiness property claims involving flood damage.

“Their conclusions are irrational and unfounded. This bill wascreated as result of working with insurance representatives for aweek,” said Ms. Quinn, adding “it doesn't seek to expand anythingin a policy or to change coverages. It absolutely attempts toprevent unfair claims handling.”

The legislation, which is due for a hearing in the HouseCommittee on Insurance, passed the State Senate 35-1 Wednesdayduring a special session of the legislature, which ends Friday.

Senate Bill 7 seeks to ensure that flood damage alone cannot beused as justification for an insurer to deny a claim. It prohibitsan insurer from using the floodwater mark as exclusive proof onwhich to deny a claim.

Ms. Quinn said adjusters, are “uniformly” telling people withflood and wind damage, “'Everything from the watermark down, wedon't cover.'”

This ignores the fact, she said, that water damage could occurfrom rain after wind damage rips a roof off.

“I don't want them to pay for flood damage they didn't agree tocover.”

She said insurers are arguing homes were pushed off foundationslabs as the result of storm surge, disregarding the fact thehouses were hit with winds over 100 mph.

The measure would bar an insurer from using the fact that a homeis removed or displaced from its foundation as a result of orduring a hurricane, as exclusive proof on which to deny aclaim.

Additionally it clarifies that the burden of proving anexclusion is on the insurer, and provides that any clause in thepolicy which attempts to deny coverage when more than one causecontributed to the damage is against public policy.

Violations of the law would permit policyholders to collectpenalties of twice the claim value from the insurer

Greg La Cost, assistant vice president and regional manager forPCI, said, “The bill is over reaching by attempting to legislateclaims handling.”

Mr. La Cost predicted that “As currently drafted, the bill couldlead to increased litigation and have the potential of havingclosed claims from this past hurricane season opened up. This couldadd billions of dollars to the total of insured losses.”

Insurers, he said, are committed to paying for all coveredclaims “and this can be seen in that 70 percent of claims have beensettled and over $7.5 billion has already been paid to helpLouisiana homeowners rebuild their lives and property followinghurricanes Katrina and Rita.”

He vowed that PCI “will fight efforts to force insurers to coverdamage that was not covered by the policy and for which no premiumwas collected.”

Mr. La Cost said, that on determining claim settlements,“insurers consider all the facts on a case-by-case basis. Whenthere are problems, there are already processes and procedures inplace to bring about a fair resolution to the claim. We are hopingto work with legislators to amend the legislation and make it lessburdensome.”

Ms. Quinn said she expects her measure to go through the Houseeasily. “I had it out of the Senate in three days with 26cosponsors,” she noted.

On another piece of claims legislation in the LouisianaLegislature, PCI said it has been successful in securing anamendment.

The group said it obtained changes after the State House ofRepresentatives passed HB 17, which would make changes to thelength of time that a consumer has to submit proof of lossregarding a claim that resulted from a declared disaster.

Originally, PCI said, the timeframe for submitting proof wasunlimited, but that was reduced to a 120-day period. That periodwill not begin until the adjuster contacts the insured, civilauthorities have allowed access to the property, and the insurerhas provided the insured with a reproduction of the proof of lossrequirements.

This article updated 3:24 p.m.