Two bills designed to stabilize the property insurance market in Louisiana and keep bad actors out of the insurance claims process unanimously passed the state House of Representatives last month.
Lawmakers passed House Bill 183, authored by Rep. Michael "Gabe" Firment (R-Grant Parish), on April 27 by a 92-0 vote. HB 183 would protect homeowners and small businesses from being conned by scammers who get policyholders to assign their insurance benefits to third parties by promising quick repairs. The process has led to inflated claims being made against insurers, supporters of the bill say.
Among the groups supporting HB 183 are the Louisiana Association of Business and Industry (LABI) and the state representatives of the National Federation of Independent Business (NFIB).
“HB 183 prohibits the assignment of benefits (AOB) in the post-loss property insurance context, which would prohibit illegitimate third parties injecting themselves into the claims process,” a LABI statement emailed to the Louisiana Record says. “The bill follows Florida’s recent prohibition against the assignment-of-benefits bill and would prohibit a contractor’s ability to take advantage of home and business owners by encouraging them to reassign their insurance benefits, often in direct violation of their insurance policy."
The bill would consider any AOB violation to be an unfair or deceptive trade practice and subject to penalties, including fines and revocation of professional licenses.
“(The) proposed law provides that any attempt to assign commercial or residential property insurance policy is against public policy, unenforceable, and null and void,” the Legislature’s analysis of the bill states.
NFIB State Director Dawn McVea said the reform is long overdue.
“HB 183 … would stop unscrupulous contractors from tricking policyholders into transferring their rights to someone else and siphoning some of the money meant for repairs,” McVea said in a prepared statement.
The House also approved HB 110, which would require insurers to allow policyholders to install a fortified roof in the event of extensive structural damage, by a vote of 97-0 on April 25. The legislation would save policyholders and insurers money in the long run by providing better protection against wind and water damage, according to supporters.