Division of Administrative Law Rules in Favor of LDI in Deductible Case

Tropical Weather
A truck maneuvers around this downed tree after strong wind gusts dropped it in west Morgan City, La., Saturday morning July 13, 2019. Most residents stayed off roads as they prepared for the rains from Hurricane Barry. (AP Photo/Rogelio V. Solis)

BATON ROUGE — From the Louisiana Department of Insurance:

The Louisiana Division of Administrative Law recently ruled that Insurance Commissioner Jim Donelon was justified in his decision to prevent State Farm Fire and Casualty Company (State Farm) from enforcing a hurricane deductible for certain losses caused by Hurricane Barry in July 2019.

Donelon issued the cease-and-desist order in August 2019 following a policyholder’s complaint that State Farm’s hurricane deductible was improperly applied to a claim. The Commissioner’s action prohibited the enforcement of a hurricane deductible for losses occurring prior to 10 a.m. on July 13, 2019.

The Division of Administrative Law found that the Commissioner’s order was reasonable, and that the decision was made following the Louisiana Department of Insurance’s (LDI) investigation and extensive communication with State Farm.

“Protecting policyholder rights is the core of what we do, and I’m gratified that we were able to succeed on their behalf,” said Donelon. “The consumer complaint process is a vital piece of monitoring the insurance market after natural disasters. Our Consumer Services staff spends a considerable amount of time and effort on their investigations, and I appreciate their dedication.”

Anyone who is having trouble with an insurance claim should file a complaint with LDI by going to www.ldi.la.gov/fileacomplaint or by calling the LDI at 1-800-259-5300. LDI fully investigates every consumer complaint and reminds all policyholders of the importance of reading and reviewing their insurance documents.

The Division of Administrative Law’s decision is available here. State Farm has 30 days from the date of signing/issuance of the decision to file an appeal.

 

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