Extending from one to two years the prescriptive period for policyholders. Louisiana Commissioner of Insurance Jim Donelon 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, the Louisiana Department of Insurance reported.
Announcing the advisory at a press conference on June 5, 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.
To Extend the One-year Prescriptive Period.
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.
“I am asking insurers to file with the Department on or before August 1, 2006, the necessary paperwork to put this extension into effect,” Donelon added.
“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 at the press conference.
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.