After post-Ida lawsuit spike, lawmakers seek big changes for home insurance claims
Here’s what happened: After rampant post-hurricane lawsuit abuse caused property insurance costs to skyrocket and limited availability in Louisiana, lawmakers are considering common-sense reforms to help curb abusive insurance litigation.
**Remind me:**Following Hurricanes Laura and Ida, Louisiana’s property insurance markets have been in crisis due to the influx of unnecessary litigation.
- One Houston-based firm is in the hotseat for it’s abusive litigation practices in Louisiana, incurring sanctions and even being suspended from practicing law.
By the numbers: Between 2020 and 2021 post-hurricane lawsuits filed in connection with claims closed without payment surged from roughly 1% to around 20%–making Louisiana one of the most litigious states in the nation at the time, according to the National Association of Insurance Commissioners.
What’s the fix? Clarifying timelines in the claims process and proof of loss, and giving both sides more time to resolve disputes before going to court.
What about Texas? Louisiana’s property insurance issues are reminiscent of the scheme storm-chasing lawyers used in Texas, first with TWIA after hurricanes and then with private insurers after hailstorms. It seems after the Texas Legislature passed a common-sense reform in 2017 to address this issue, the storm-chasing lawyers took their playbook to Louisiana, instead.
TLR Thoughts: A lawsuit should be the last resort to resolve a dispute, not the first. When dishonest lawyers abuse the legal system, we’re all left paying the price with skyrocketing premiums and fewer insurance options.
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