Claims News Service, July 12, 9:59 a.m. EDT — The Louisiana Department of Insurance passed a directive yesterday that mandates all property/casualty insurance companies extend the period of time for claimants to file suit or legal action to recover damages from Hurricanes Katrina and Rita to two years. Currently, the state allows just one year from the date of loss to file action.

Referred to as Directive 199, the mandate was signed by James Donelon, Louisiana’s commissioner of insurance. In describing the motivation behind the action, he said that many insureds who suffered losses may not know the exact date or extent of their losses since many were evacuated.

“Many Louisiana insureds who sustained damage caused by Hurricane Katrina and/or Rita have still not been able to initiate or finalize repairs to the damaged property due to the shortage of contractors to handle the unprecedented number of claims generated. As such, many insureds do not now know, and do not presently have the ability to obtain the knowledge, of the extent of the damage caused to their insured properties.”

Donelon went on to say that the 12-month prescriptive period currently in place is impractical and would hinder mediation and resolution efforts that are ongoing between carriers and insureds.

With the directive in place, insureds in the state now have until Aug. 30, 2007, to file suit or legal action with regard to a claim for damages from Hurricane Katrina. For Hurricane Rita claimants, the deadline was extended to Sept. 25, 2007.