Insurance companies could be fined for refusing to cover the cost of evacuating Hurricane Ida

State Farm challenged Insurance Commissioner Jim Donellon’s order after the storm

Insurance companies could be fined or suspended from doing business because Louisiana Insurance Commissioner Jim Donellon refused to comply with an order to cover the temporary accommodation costs of policyholders who were evacuated during Hurricane Hooda. But one thing Donnelly can’t do for companies is to make direct claims to their policyholders.

Donellon discussed the issue as a featured guest at a Baton Rouge Press Club dinner on Monday and said that when he learned that the state farm refused to waive the mandatory deportation requirement to cover the deportation costs.

The problem is that most homeowners have an insurance policy that covers the cost of living only if the policyholder is subject to a mandatory eviction order.

Following Ida’s landfall, Donalon voluntarily appealed to insurance companies to waive that provision after receiving an email from Allstate, the company has already decided to do so. The USAA and other companies joined Allstate to fulfill Donnelly’s request, but State Farm did not do so, prompting Donnelly to change his request into an order.

State Farm now plans to challenge that order in court, Donellan said.

When contacted by email on Monday, the company did not give a specific reason for refusing to pay the cost of the temporary stay. Instead, a corporate spokesperson forwarded a general statement stating, “State Farm stands behind our clients to help them recover in the states affected by Hurricane Ida. Our hearts go out to all who are affected. We work with our clients one-on-one to determine their personal situation and provide assistance in their recovery process. We are committed to paying what we owe and should encourage our policyholders to file a claim against those who have suffered. ”

State farm officials were equally vague with the insurance commissioner, telling them only that they intended to follow the language in their policies, Donellan said.

The Insurance Commissioner’s emergency announcement is nothing new. Following Hurricane Laura in 2020, Donalon issued an emergency declaration prohibiting policyholders from canceling or raising premiums, and health insurance companies suspended limits on prescription renewals. A similar announcement was made after Isaac, Gustav and other notable storms.

Last year, health insurance companies challenged Donellon’s order requiring extended coverage for telemedicine and its order suspending the provisions of the “step” therapy policy – which requires patients to start at least expensive therapy treatment before using more expensive alternatives – but the order remains in court. Under investigation, he said.

When policyholders were having problems in Allstate after Hurricane Katrina, Donnelly said he fined the company $ 250,000.

Donellan said, “I have authority over companies that are licensed to do business in our state. “It includes the right to impose fines. That includes the suspended authority. That includes revoking their right to do business in our state. ”

Many counties and municipalities did not issue mandatory evacuations before Hurricane Ida because there was not enough time to evacuate safely. The fast-moving storm took Louisiana by surprise, and officials worried that forced evacuation would create a situation reminiscent of Hurricane Ivan in 2004.

Donellan said, “It was a terrible experience for those people, especially the elderly who were stuck in it.

During the mandatory evacuation for Evan, several residents in southeastern Louisiana were stuck in gridlock traffic for 8 hours, running out of fuel, food and water, Donellan said.

“It was part of the decision-making process to decide whether to order deportation by those public officials,” Donellan said.

Although Donalon has the power to fine or suspend the insurance company, he cannot sue the policyholder. He also said that only the courts can issue orders to pay the policyholders.