Louisiana Department of Insurance
MONTHLY REPORT
Volume 12, Issue 3
March 2012


Members

Commissioner Jim Donelon
Theodore "Ted" Haik, Jr., Chair
Jeff Albright, Vice Chair

Raymond J. Aleman, Sr.
Lee Ann Alexander
Paul Buffone
Sheriff Greg Champagne
Representative Greg Cromer

Manuel DePascual
Nick Gautreaux
Michael Guy
Lance "Wes" Hataway
LTC John A. LeBlanc
Senator Eric LaFleur
Ann Metrailer
Robert Moorman
Senator Dan "Blade" Morrish
Chris Roy, Jr.
Stephen Schrempp
Representative Kirk Talbot
Earl Taylor
Rina Thomas


Staff


Terrell B. Moss, Director

David Evans,
Supervisor/Research Analyst

Katie Walsh, Administrative Assist./Research Analyst

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Get “FloodSmart” During National Flood Awareness Week

Earlier this month, Lafayette and the surrounding areas were hit with storms that resulted in severe flooding, with as much as 14 inches of rain in some areas. Just last week, the Baton Rouge area was affected by a series of severe thunderstorms that caused substantial flooding.

Water damage to a home can be very costly—one inch of water flowing into a 1,000 square foot home can result in a loss in excess of $10,000 that is not covered by a basic homeowners, renters or business insurance policy. Most flood insurance policies are provided by the National Flood Insurance Program and must be purchased separately from your homeowners policy through your insurance agent.

Only about 30 percent of Louisiana households are currently protected by flood insurance.  Commissioner Jim Donelon urges everyone to take the necessary steps to protect their homes from a potential disaster.  National Flood Safety Awareness Week (March 12-16) is a perfect opportunity to assess local flood risks, get educated about flood insurance and purchase coverage. 

Flood insurance policies are very affordable—the average cost for a standard policy in Louisiana is less than $60 per month. In low-to-moderate flood zones, Preferred Risk Policies for flood insurance can be purchased for under $200 per year. It is important to know that in most cases, flood insurance policies do not take effect until 30 days after the date of purchase.

Contact your insurance agent to learn more about protecting your home from flooding, or visit the Federal Emergency Management Agency’s (FEMA) website, www.FloodSmart.gov.

Active Tornado Season Forecast; Protect Yourself and Your Property

Between the end of February and March 3 of this year, more than 150 tornadoes touched down across the Midwest, interior south and southeast United States causing over $1 billion in damage. Earlier this month in Louisiana, 12 people were injured and one person was killed in Rayne by a tornado that spawned from the storm system. Just last week, disastrous storms and tornadoes hit much closer to home, raging through Prairieville, just south of Baton Rouge, causing damage to many homes in Ascension Parish. This should serve as a reminder to us that tornadoes can strike at any given time and place, and we should make sure we know how to protect ourselves and our homes in the event of another disaster like this one.

Tornado season typically begins in March, and forecaster Accu-Weather predicts an above-normal number of tornadoes for the 2012 season. Commissioner Donelon recommends that all homeowners know what is covered in their policies and what is not. Most homeowners insurance policies cover fire, theft, wind damage and explosion.

FEMA recommends that you immediately seek shelter when under a tornado warning. Most injuries associated with high winds are from flying debris, so protect your head.  If you are inside of a structure when the warning is issued, get to a pre-designated shelter area, a safe room, basement or lowest building level. If there is no basement, go to the center of an interior room on the lowest level, such as a closet or interior hallway, away from corners, windows, doors and outside walls. Do not open windows during a tornado. If you are inside of a vehicle, trailer or mobile home, get out immediately and go to the lowest floor of a nearby, sturdy building. If you are outside with no shelter, lie flat in a nearby ditch and cover your head.

For more safety tips, visit www.FEMA.gov.

Cataloging Valuables Proves to be Valuable

When considering purchasing flood coverage or updating your homeowners insurance policy, the National Association of Insurance Commissioners (NAIC) recommends that policyholders also create or update an inventory of household contents in case of theft or disaster, such as flooding and tornadoes. The NAIC recently conducted a survey and found that 59 percent of consumers did not have an inventory of their possessions.

Documenting your belongings helps to determine the level of coverage you will need before a disaster strikes and is also useful for filing a claim after a major loss. When cataloging your valuables, it is recommended that you save receipts and document with pictures. Keep your inventory up-to-date, and also keep a backup copy of the inventory outside of your house.

When documenting household items, please consider the following tips:
• Take a few pictures in each room with drawers and cabinets open. Then, detail individual items starting with the most expensive/important ones.
• Cash, jewelry, antiques, firearms, etc. are all subject to limited coverage. Check your policy and add a “scheduled property” type of endorsement to your existing coverage if necessary.
• If you are going to get a safe to secure documents at home, make sure it’s fireproof and waterproof. Digital media needs extra protection, so consider a safe built for that purpose.
• The “actual cash value” of an item may be much lower than the cost to replace it. This is especially true with electronics. Work with your insurance agent to be sure you have the right amount and type of coverage with either actual cash or replacement value.

The NAIC offers helpful tips and tools for cataloging personal belongings, including apps for smartphones and a home inventory spreadsheet.  Visit www.naic.org for more information.

Tax Tip: Claim Your Citizens Insurance Assessment Rebate

When filing your taxes this year, don’t forget to claim your Louisiana Citizens Property Insurance Corporation (Citizens) tax rebate.

Commissioner Donelon has launched a state tour and media campaign to remind taxpayers that they can deduct from their state income tax the Citizens assessments they paid with their residential and business property insurance premium. The assessment re-pays the bonds that were issued to keep Citizens solvent following the 2005 hurricanes and can be claimed as a “dollar-for-dollar” tax rebate on the state tax form.

Many people do not claim the rebate, even though it is available to all property owners, and the unclaimed funds go into the state treasury for general spending. Property owners have four years to recoup past assessments and can claim their rebate by mailing or faxing form R-540INS and their insurance declaration page to the Department of Revenue.

The state tax forms also allow deductions for retrofitting homes to comply with the state’s uniform construction code. These improvements can also result in homeowners insurance premium discounts, determined by the insurance company.

Further information about the tax breaks can be found on the Louisiana Department of Insurance website at www.ldi.la.gov.