Virtually all Louisiana homeowners insurance carriers have agreed to extend the time period to file a hurricane-related lawsuit, said the commissioner.
Commissioner James Donelon said the time period for extensions may vary. “Most insurers have agreed to the extra year,” he said in a statement.
Companies representing 99.8 percent of all homeowners business have agreed to the extension.
Some companies will extend the so-called prescriptive period to two years, but are reserving the limited right to give the department up to 60-day notice to rescind the stipulation if a judge declares the extension unconstitutional.
Amy Whittington, Louisiana Insurance Department spokeswoman, said a state court is currently reviewing the constitutionality of the law passed by the Legislature, extending the prescriptive period to two years.
While the courts will take seriously any violation of contract, such as an insurance policy mandated by the Legislature, there can be times when it is in the interest of public policy to do so, she said.
“Given the unprecedented number of insurance claims filed following Hurricanes Katrina and Rita, one year has not been enough time for many policyholders and insurance companies to work out a final settlement,” Mr. Donelon said.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.