Commissioner Donelon Urges Insurers To Extend Hurricane
Katrina/Rita Claims Prescription
Released: June 5, 2006
Commissioner of Insurance Jim Donelon held a press conference today to let consumers
know he has issued Advisory Letter 06-04 to the approximate 100 companies with homeowners
insurance policies in Louisiana, requesting their cooperation in extending from
one to two years the prescriptive period for policyholders with Hurricane Katrina
and/or Rita claims.
Donelon said a Louisiana policyholder's right to file suit on a homeowners insurance
claim is limited to 12 months in most cases. "Given the unprecedented number
of claims following Hurricanes Katrina and Rita, one year is simply not going to
be enough time for many policyholders and insurance companies to work out a settlement
that is in the best interest of both," Donelon said.
Under applicable Louisiana law, there are at least two ways for an admitted insurer
or surplus lines insurer to extend the one-year prescriptive period to two years.
The insurer can file with the Department of Insurance either (1) an endorsement
or (2) a stipulation, stating that a change in the prescriptive period is being
made. "Today I am asking insurers to file with the Department on or before
August 1, 2006, the necessary paperwork to put this extension into effect,"
"At a luncheon in Lafayette today, I ended a month-long, statewide storm awareness
tour. As I talked to policyholders and insurance industry representatives throughout
the state, I became certain that extending the prescriptive period is the right
thing to do," Commissioner Donelon said.
To assist policyholders, the names of insurance companies who agree to extend the
prescriptive period will be listed on the Department's Web site and publicized through
a variety of mediums.