By Emily Burley
With hurricane season approaching, Louisiana Insurance Commissioner Jim Donelon is urging local homeowners to prepare for hurricane season by conducting an insurance audit.
“Know what your coverage is,” Donelon said. “Know your insurance value, which has nothing to do with the estimated value of the home.
The insured value takes into account the cost of replacing damage that may occur in your home in the event of a natural disaster, he said.
Donelon listed three vital steps he needs to take to help policyholders get their insurance to work for them. “No. 1, be prepared,” he said.
Before you leave, take a walk around your home and record a video or still film your assets, he said.
“All your assets are covered by your insurance as part of the coverage of your content.
Donelon said taking the time to document property before a natural disaster is vital to providing adequate coverage.
“It is so useful for the policyholder to be able to show the undamaged and real value compared to trying to reconstruct what is left after the damage.”
The second step is to contact your insurance specialist, he said.
“Review all your insurance needs. It’s a good time to do an annual review. Focus on property insurance, both wind cover and flood cover. “
Flood-covered policyholders are encouraged to maintain it. “If they are subsidized, they have the right to continue this coverage and even pass it on to their descendants by inheritance or to buyers at the time of sale.”
The third precaution is to know what your insurance does not cover. For example, homeowners’ insurance does not cover floods.
Usually the coverage of damage from fire, hail, tornado and wind comes with the deduction of a storm or hurricane. One-third of the state’s policies have a 5 percent deduction on the insurance value of your home. For a house valued at $ 200,000, the deduction for hurricane damage is $ 10,000 out of pocket.
Donelon said he believed everyone in Louisiana should have flood cover. “Only 25 percent of Louisiana policies have flood insurance. That’s less than in southwestern Louisiana.
Donelon explains this by the lack of frequent, significant floods in the area. “When people don’t think there’s a risk, they don’t want to spend the money. But we are all at significant risk everywhere in Louisiana.
“I urge everyone to have access to the still heavily subsidized national flood insurance program,” he said. “A new rating system called Risk Assessment 2.0 has come into force. This has dramatically increased the cost of flood insurance in vulnerable areas.
The national flood insurance program was determined by FEMA based on the region or zip code of your home. However, the new Risk Assessment 2.0 has changed the way the vulnerability of your home is assessed.
“The main change from the old zoning system is that now each policy is determined on the basis of individual assessment,” he said. “Twenty percent of policyholders are expected to see a reduction in the premium for the first year of a risk rating of 2.0.
Seventy percent of policyholders will see a minimum increase of $ 10 per month or less, and 7 percent experience increases of $ 20 per month or less.
This new system will be launched on 1 April for policy renewals and on 1 October 2021 for new policyholders.
Donelon acknowledged that Risk Assessment System 2.0 is receiving legislative repulsion from coastal states because of the high rates seen by 3 percent of policyholders.
“Thousands of cases in Louisiana flood insurance for these properties has increased by several percent compared to the old system,” he said. “It simply came to our notice then. This makes these properties useless overnight.
Donelon predicts lawmakers may be able to cut the 18 percent annual increase. He expects the ceiling to be agreed to 8% or 9% multiplication.
Due to inflation over the last two years, policyholders are being asked to file an additional claim if they believe they have been inadequately compensated.
“Roofs, contractors, suppliers, all their prices have risen dramatically from what they were two years ago,” he said. “If a year and a half ago you received a check for what you thought was a complete overhaul of your house… and it is not enough to return what you actually spent more than your deductible, you have the right to file an additional claim.”