As of Jan. 1, Louisianans could be dropped by their homeowners insurance companies without warning, as the state deregulated the market with a new law taking effect at the start of the year.
What’s happening?
The new law ends what was known as Louisiana’s “three-year rule” and threatens to worsen the Bayou State’s “ongoing insurance crisis,” New Orleans’ Fox 8 reported. Insurers can now drop up to 5% of their three-year-old policies. Previously, those homeowners “could not be denied coverage, face larger deductibles, or be burdened with repeated rate increases,” Inside Climate News reported in July 2024.
The state’s Department of Insurance says this will increase competition, and veteran agent Dan Burghardt told the station that rates have stabilized. Any dropped policies have to be approved and are restricted by parish or ZIP code.
The state legislature also gave companies more time to pay claims, according to Fox 8. And there are lesser penalties for bad-faith actions by insurers…