Rebuilding homeowners should get protection

March 31, 2006

Reported by: The Associated Press

Louisiana insurance regulators should prevent homeowner insurance companies from raising rates and canceling policies so residents hit by Hurricanes Katrina and Rita have coverage while they rebuild.

That's according to Bob Hunter, a former Texas insurance commission and now head of insurance for the Consumer Federation of America. Hunter says that a moratorium on cancellations and rate hikes in Louisiana should have run for at least year, instead of expiring at the end of 2005. Hunter says it will be difficult for Louisiana residents to rebuild if they can't afford or get insurance coverage.

But acting Insurance Commissioner Jim Donelon says that idea is unrealistic. Donelon says Louisiana left its insurance moratorium in place longer than Florida did after the disastrous 2004 hurricane season _ and longer than Florida and Mississippi did in 2005, Donelon said.

Under a rule now in effect, insurance companies cannot cancel policyholders in Louisiana while they're repairing their homes, but can raise rates through the normal rate-setting process.