Louisiana capitol

Several state lawmakers who represent Southwest Louisiana told insurance officials Wednesday of the frustration residents are encountering with the handling of insurance claims from Hurricanes Laura and Delta.

The Joint Insurance Committee meeting at the state Capitol centered around emailed complaints from homeowners that are struggling to recover from Laura, a devastating Category 4 storm that hit Aug. 27, followed by the Category 2 Delta that made landfall Oct. 9. Complaints included a disconnect between the replacement costs estimated by both the adjuster and contractor and a revolving door of third-party adjusters coming from outside the state with inadequate training.

“What can we do to make this more efficient and increase communication,” Sen. Mark Abraham, R-Lake Charles, asked.

Rep. Phillip Tarver, R-Lake Charles, said adjusters should be on the ground in Southwest Louisiana to assess damage, instead of relying on drone footage or photographs.

“A person who has not been there doesn’t get the picture,” he said. “I want somebody to come out and see my damage and experience what I’m going through.”

Tarver said many residents aren’t aware of what the state Department of Insurance does or that it can receive consumer complaints. Insurance Commissioner Jim Donelon said his office is spending $50,000 on radio ads from Lake Charles to Monroe to inform residents on how to get in touch with the office. Donelon said more than 450 of the 700 complaints his agency has received since Laura and Delta have been resolved.

Abraham spoke on the quality of training for adjusters, saying he heard one worked as a hairdresser before taking a three-week course.

“How can they adequately analyze a house,” he asked.

Jeff Albright, with Independent Insurance Agents and Brokers of Louisiana, said insurance companies have outsourced to independent, third-party adjusters to cut costs. He said those adjusters end up agreeing to do more work than they’re capable of. After a major disaster, claims are often reassigned from one adjuster to another to spread out the workload.

Albright said most of the claims he has heard from agents have been settled fairly reasonably.

Rep. Ryan Bourriaque, R-Cameron, said some residents in his district feel the experience after Laura and Delta is similar to Hurricanes Katrina and Rita in 2005. He asked insurance officials to work with lawmakers on ways to streamline the claims process.

“We’re going to have a hurricane season again next year,” Bourriaque said. “Whatever we need to do to help the policyholders feel like it will be better the next time.”

Albright said independent agents are readily available to work with the Legislature on solutions. However, getting enough adjusters on the ground with adequate expertise will always exist after a major disaster, along with securing an agreed upon amount of loss, he said.

Kevin Cunningham, a representative for the American Property and Casualty Insurance Association, argued that a “significant majority” of the claims have been handled to the satisfaction of the homeowners. He said lawmakers should consider that only 700 complaints were made, compared to the more than 190,000 insurance claims filed as a result of Laura and Delta.

Tarver countered, saying he knows of many residents who have not filed complaints, yet still have issues with their claims.

Erin Davison, executive director of Big Brothers Big Sisters of Southwest Louisiana, said the hurricanes have impacted the families the agency cares for. Many don’t have the financial resources to fight for replacement costs, she said.

COVID-19 shutdowns have caused further problems, with 60 percent of BBBS families being in and out of employment since mid March, Davison said. Since the hurricanes, many residents, especially those in North Lake Charles, have struggled.

“There are people living in tents that have insurance on their dwelling,” she said. “The carriers are doing their job. The agents are doing their job. It’s the third-party claims adjusters.”

Davison said her insurance adjuster after Hurricane Rita in 2005 was an employee of the insurance company. The issue with today’s third-party adjusters today is causing a major disconnect with homeowners, she said.

“My desk adjuster is in Atlanta,” Davison said. “They don’t live in Louisiana or Lake Charles. Half of the time, they think we’re in New Orleans.”

Davison asked the committee to offer up legislation next session to streamline the claims process, especially for underserved residents in Southwest Louisiana. 

“I’m urging you ... do something right,” she said.