Deductible relief on the way, just not this season

Last year two major hurricane strikes, Ike and Gustav, showed there was a need to give homeowners relief from multiple insurance deductibles being charged for damage caused by each named storm.

The new law, authored by state Rep. Chuck Kleckley, RLake Charles, and signed into law by Gov. Bobby Jindal, will permit insurance companies to charge only one deductible per hurricane season, June 1-Nov. 30, no matter how many named storms hit a given area.

However, the new law doesn’t go into effect until Jan. 1, so this hurricane season will not be covered by it.

Insurance Commissioner Jim Donelon said he expects companies to increase premiums to cover the added exposure. But Kleckley, chairman of the House Insurance Committee, said companies may not want to increase premiums if they want to increase business.

Donelon expects premiums to go up an average of 1.8 percent statewide. That could mean premiums in the most hurricane vulnerable parishes could go up four or five percent.

But that would be well worth it if a homeowner gets hit by more than one damaging named storm in a season.

Donelon said currently, if a homeowner has a $200,000 policy with a 2 percent deductible, he would have to pay the entire $4,000 deductible. If another storm hits this year, and his property is damaged again, he would again be liable for the entire deductible.

Beginning next year, the homeowner would be liable for just one of those deductibles.

The new law is based on one developed in Florida, which was hit by four named-storms in one year in 2004.

Sen. Troy Hebert, DJeanerette, chairman of the Senate Insurance Committee, said if the premium increases turn out to be too high, lawmakers will revisit the issue next year.

The multiple hurricane bill was one of the main parts of Donelon’s legislative agenda in the past session of the Legislature.

Experience with hurricanes Katrina and Rita in 2005 and then Ike and Gustav in 2008 showed that Louisiana homeowners need added protection since our coast is so vulnerable to multiple strikes.

Many homeowners would be hard pressed under those circumstances to make a complete recovery if they have to pay large deductibles within weeks of major hurricanes hitting. We’ll just have to keep our fingers crossed that the current hurricane season will prove to be a quiet one.

– The American Press, Lake Charles, La.