After Louisiana citizens endured two consecutive prolific hurricane seasons in 2020 and 2021, state lawmakers made the adjustment of property insurance claims a top priority during this year’s Regular Legislative Session. On August 1, 2022, two new bills concerning claims adjusters went into effect: Senate Bill 198 and Senate Bill 214. Both of these bills have the potential to affect how insurers handle the adjustment of property insurance claims in the state.
Senate Bill 198: Designating an adjuster as the insured’s “primary contact”
Among other things, Senate Bill 198 created a new law which imposes several requirements on insurers when assigning multiple claims adjusters to a personal residential insurance claim in the wake of a “named storm or hurricane for which a state of emergency or disaster is declared.” These added requirements apply only when the insurer changes the adjuster who is “primarily responsible” for the claim three or more times within a six-month period. Under those circumstances, the new law requires the insurer to provide the following to the insured:
- A written status report that includes pertinent information about: (1) the insured’s deductible; (2) the amounts available under each coverage; (3) the amounts paid under each coverage; (4) when, where, and to whom payments were issued; and (5) items presently known to the insurer, but for which the insured must give further information to complete the adjustment process;
- A primary contact until the insurer closes the claim or a party files suit on the claim; and
- Two or more direct means of communication with the primary contact.
The insurer’s designation of one adjuster as the “primary contact” on the claim does not preclude other claims personnel from working on portions of the insured’s claim. Nonetheless, it was clear that the Legislature’s intention behind Senate Bill 198 was to assure that policyholders have a consistent point of contact throughout the life of the claim.
Although the new statute does not have a penalty provision, an insured may argue that violation of the statute gives rise to a claim for bad faith practices in handling and adjusting the claim. In such cases, it is certainly foreseeable that the plaintiff (the insured) will issue discovery to the defendant (the insurer) requesting the identities of all adjusters who were involved on the claim. Thus, the best practice for insurers in the aftermath of a named storm may be to have the initial adjuster serve as the “primary contact” for a claim. The primary contact can pass on details in the file from other vendors or adjusters as well as provide contact information for other adjusters.
Senate Bill 214: All adjusters must appear and testify in Louisiana in lawsuits arising from insurance claims they adjusted in this state
Senate Bill 214 amended the process for obtaining testimony from non-resident witnesses, by creating an exception for non-resident claims adjusters who adjust an insurance claim in Louisiana in two inter-related ways:
- The new law requires non-resident claims adjusters to be available for deposition via telephone or video teleconference in suits arising out of the claim they adjusted in Louisiana, but limits the admissibility of the adjuster’s deposition testimony at trial.
- Relatedly, the new law requires non-resident claims adjusters to appear and testify at trial in the suit.
Senate Bill 214 essentially places the onus upon insurers to make their assigned claims adjusters available to testify at trial in Louisiana regardless of their state of residence. As a result, insurers should carefully evaluate their processes for assigning adjusters to claims made in Louisiana, and consider the costs associated with selecting non-resident adjusters to handle those claims.